CLAUSE 7.—(Imperial Preference.)

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(1) With a view to conferring a preference in the case of Empire products, the duties of customs on the goods specified in the Second Schedule to this Act shall on and after the dates provided for in that Schedule be charged at the reduced rates (hereinafter referred to as "preferential rates") shown in the second column of that Schedule, where the goods are shown to the satisfaction of the Commissioners of Customs and Excise to have been consigned from and grown, produced or manufactured in the British Empire.

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For the purposes of this Section—
The British Empire" means any of His Majesty's Dominions outside Great Britain and Ireland, and any territories under His Majesty's protection, and includes India:Provided that where any territory becomes a territory under His Majesty's protection His Majesty may by Order in Council direct that that territory shall be included within the definition of the British Empire for the purposes of this Section, and this Section shall have effect accordingly.Goods shall not be deemed to have been manufactured in the British Empire as aforesaid unless such proportion of their value as is prescribed by regulations made by the Board of Trade is the result of labour within the British Empire.

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(2) Where the Board of Trade is satisfied as respects any class of goods to which the preferential rates apply that those articles are to a considerable extent manufactured in the British Empire from material which is not wholly grown or produced in the Empire, the Board may by Order direct that the preferential rate, shall be charged only in respect of such proportion of those goods as corresponds to the proportion of dutiable material used in their manufacture which is shown to have been grown or produced in the Empire.

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(3) Where goods are manufactured in a bonded factory in Great Britain or Ireland from dutiable material shown to the satisfaction of the Commissioners of Customs and Excise to have been consigned from and grown or produced in the British Empire, the duty on the manufactured goods shall, to the extent to which they are shown to have been manufactured out of such material, be charged at the preferential rate.

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(4) Any Order in Council made under this Section shall be laid before each House of Parliament forthwith, and, if an Address is presented to His Majesty by either House of Parliament within the next subsequent twenty-one days on which that House has sat next after the Order is laid before it, praying that the Order may be annulled,
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His Majesty in Council may annul the Order, and it shall thenceforth be void, but without prejudice to the validity of anything previously done there under.

On a point of Order. I wish to point out that in. addition to the general Amendment of which I have given notice, I wish to move an Amendment exempting from the provisional preference the Import Duties which were imposed by the Act of 1915. I would like to ask whether I should put in an Amendment at the beginning of this Clause exempting the new Import Duties, or whether I should move it on the Schedule when it comes for discussion?

That is to say, in spite of the general discussion on preference now we shall not be debarred from moving in Schedule 2 to amend the second column, line 27. I wish to ask whether the discussion now will make any Amendment on. Schedule 2 out of order?

No, not an Amendment of that character. When we come to Schedule 2 I shall not think it my duty to permit a series of Amendments moving to omit one after the other similar articles, but I recognise the particular things referred to, which are those standing in a separate category from the other article. That will be quite a legitimate point to raise later.

I am obliged for the decision. I beg to move, in Sub-section (1), to leave out the words
with a view to conferring a preference in the case of Empire products, the duties of customs on the goods specified in.
The object of this Amendment is to raise discussion on the general question of Imperial Preference, and, speaking for myself, and I am sure for many who are associated with me, we wish to make it perfectly clear that we appreciate quite as much as those who proposed this preferential treatment the gallant sacrifices which the Colonies have made in this War, and the devotion with which they regard us, and we regard them. The point we are discussing is not whether we are Imperialists in that sense or not, but whether financial treatment of the kind proposed
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by the Chancellor of the Exchequer is, in effect, the best means of securing the solidity and building up of the Empire. If the Committee will look at the Second Schedule in which the articles on which preference is to be given are detailed, and will examine the Board of Trade Returns showing the trade which we are doing with the various Colonies, they will observe that there is a fatal defect in the scheme put forward by the Chancellor of the Exchequer. It is this: that the financial advantage by which it is proposed to consolidate the Empire is so unequally distributed that a great part of it does not go to the Colonies at all—I am referring particularly to the preference on tea, which so far as it is enjoyed, will be enjoyed by shareholders in this country, and that in respect of other preferences, more substantially such as sugar and other things, they do not go to the Colonies which, if we agreed with the proposal, we should most desire them to go to. The basis which the Chancellor of the Exchequer has been driven to adopt for his scheme of preference is a basis which, so far from achieving what they allege, will only cause irritation and annoyance. We know perfectly well that, in view of the settled fiscal policy of this country, the Colonies accepted with perfect goodwill our refusal to make a preferential arrangement in their favour. I think it was Sir Robert Borden who said, after one of the Debates in the Imperial Conference, that our position being this, it could not be a cause of offence to any of the Colonies that we did not make special arrangements in their favour.

The situation has changed, and it is proposed in this Bill to jettison the ground on which we stood before. It is proposed to give up the policy of perfect freedom of trade with all parts of the world and to admit, in the words which I am proposing to leave out, that it is desirable that we should give a preference to the constituent parts of the Empire. Once we do that, and once that becomes a settled part of the policy of this country, it is inevitable that the various Colonies should begin to ask themselves, "That being so, what am I getting out of it?" and, secondly, the manufacturers will ask, "What advantage does it confer on them?" Anyone who has followed the proceedings of the Committee on Restriction of Imports must have seen what a storm of interest arises immediately the Government propose to foster this or to check that particular in-
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dustry. So the first objection to the words of the Clause which set up the principle of Imperial Preference is this—that they will set up irritation in the Colonies instead of a feeling of gratitude, because certain Colonies, such as New Zealand, for example, derive no benefit at all; others, such as Australia, may, in some small industries, derive advantage, but they derive no benefit in their most important industries, which are the supply of raw materials. We have already had some illustrations by now, even in this House—some opportunity of judging what sort of annoyance and irritation will be set up between this country and the Colonies by attempting anything of this kind. An hon. Member asked the Under-Secretary to the Colonies the other day whether he would do something to prevent South Africa buying locomotives in the United States—that is to say, inasmuch as we are conferring financial benefit on some industries in South Africa, this House was proposing to suggest that the South Africans wore doing wrong in exercising perfect freedom in the purchase of their essential commodities in the cheapest market. So we find ourselves in the position that we have abandoned the only good argument, the only sound ground for having perfect peace and content as regards fiscal arrangements between the different parts of the Empire. Some hon. Gentlemen will ask, in reply to this: "Should we not treat our brothers better than we treat strangers?" I would call their attention to the fact that more family disturbances are caused by wills and financial arrangements in families than by any other cause. The real tics which do bind the Empire together are not preferences at all, and certainly not preferences founded on the adventitious and fantastic Schedule which has been introduced in this Bill.

We know, of course, that support for this proposal is forthcoming from all sides. In the first place, there is the right hon. Gentleman himself, the Chancellor of the Exchequer, who knows and says that if his words are inserted he has achieved the first milestone in the great course which he intends to take. He will have got this House to decide that the thing is desirable in itself, and it will only be a matter later of developing the full policy. The day which his distinguished father looked for has come. That is an intelligible policy—a policy which has many adherents—but it is not a policy which is really carried out fairly in the Bill. Hon.
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Gentlemen who support that policy should move to amend the Schedule, or to alter the preferences in some way, so as to give an appearance of fairness to the distribution of favours. On the other hand, we have a number of hon. Members supporting the preference because, for various good reasons, they, at the time of the General Election, gave certain pledges, and they feel bound to carry them out by supporting a preference on existing duties. They are told that the Government policy will be unfolded to them later in the year, and, no doubt with perfect good faith, they believe that, even if they support this Clause with its provision of preference, they are not going in any way to compromise their position as free traders. It is perfectly obvious that, if we decide in Clause 7 that we will give a preference to the Colonies, whatever the President of the Board of Trade may wish to say, or whatever policy may be in the "locked box," certain parts of it will be determined in advance by the decision of this House. Therefore, it will be quite impossible, if that Clause becomes the law of the land, whatever the Government may wish, to go back on the policy of Preference, and to that extent the Liberal free traders who are supporting the Bill will find themselves hopelessly and irrevocably compromised. Somebody is going to be disappointed—I do not want to use the word "deceived." it is either the tariff reformers who see in this Bill a beginning of the realisation of their dream, or it is the Liberal free traders who see in the Bill nothing but a minor concession of no importance which cannot possibly lead to the adoption of a policy to which they are opposed. It is that uncertainty as to what is really going to happen that makes people wonder how far there can be any sincerity in any form of coalition.

Supposing that this Clause is passed, we shall find that under it—indeed that is the Government's case—new industries will be created. People, taking advantage of the preferential rate which this Clause allows, will embark upon new undertakings, sink their capital in them, find employment for people, and when that has happened they will rightly and naturally look to the Government and clamorously ask that the protection under which they have been able to establish their trade should not be withdrawn. We shall have many demands for new preferences, and we shall not be able to reduce the old preferences because we
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shall be told that, on the faith of the Government's policy, people have sunk their money in starting new industries. We have not had to wait very long for further demands. Mr. Hughes, who, I believe, has now finally departed for Australia, in one of his farewell speeches, said:
Nothing is more certain that that, unless a definite policy is adopted that will give British manufacturers a preference in the home markets, and to the Oversea Dominions a larger market within the Empire for their raw material, not only will Imperial trade suffer, but the Empire will tend to disintegrate.
An hon. and gallant Gentleman says "Hear, hear." That is the protectionist's case. If he is right in saying, "Hear, hear," and in believing in that policy, then the Liberal free traders must be wrong in supporting the policy as their outward concession to the principle of coalition. Here you have a demand, not for these tiny and fantastic preferences, because they are given on duties imposed for totally different purposes, but a demand for a substantial preference on things with which they do supply this country—namely, raw material and articles of food. Otherwise, the scheme of Preference, far from being an advantage, will be merely fantastic and irritable. We come to this point, which is really the chief fiscal objection to the principle of Preference. You cannot give a preference to the Colonies unless you accompany it by a full-blooded tariff. You cannot give a preference unless it is a preference over somebody else, and that somebody else has got to be a foreigner. Therefore, if we adopt the principle of Preference, even in this small matter, we shall be driven to a substantial preference in those articles with which the Colonies really supply us, and in order to give that substantial preference we shall be driven to build a tariff wall in this country against foreign industries. That has been perfectly clearly stated by the Leader of the House, who said:
It is impossible to tax one manufactured article without immediately raising an agitation for the taxation of all manufactured articles. Preference in trade and the taxation of foreign manufactured articles are part of one idea. The adoption of the one will inevitably lead to the adoption of the other.
It therefore behoves all free traders to resist the beginning of the evil in this Clause, because, if we once allow it, we are logically committed to the full-blooded policy of a tariff. We believe that the sort of policy that is represented by Tariff Re-
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form is absolutely hostile to the real true world spirit of to-day. It is a real division of the opinions of mankind. We have some people—we often hear them in this House—who detest the idea of a foreigner, and who, immediately they hear of a foreigner, want to persecute him, to inspect him, or to drive him out. They loathe the idea of trading with a foreigner. We do not think that at all. We believe in a much wider community of the world than that. We believe that the world is yearning for peace and is willing to see a wider conception than a purely national and narrow conception, and we believe that for our country, which has always been in the van of liberty and universal brotherhood, to be the first country to sot up barriers after having been a Free Trade country—well, I cannot express myself— would be altogether retrograde and hostile to the thing which we desire to be done. President Wilson, in his fourteen points which were the basis of the settlement of the War, laid it down very clearly that we should destroy and not set up economic barriers. We are setting up economic barriers. I am very sorry that the First Commissioner of Works does not attend the Debates on Preference more frequently. He was a very able exponent of the Free Trade case, and now he is a very able exponent of the opposite case. He said, "If you take down a duty between us and the Colones, you thereby promote Free Trade." What he and what my hon. and gallant Friend (Colonel Sir J. Remnant) overlooks is that, if you promise a man a preference it means that you undertake to keep on a higher duty against someone else. Therefore, instead of it being a step in the direction of Free Trade to establish by law a system of Preference, it is really a promise to all and sundry that you will keep on a system of tariffs.

I am sorry I misinterpreted my hon. and gallant Friend's desire. I hope that the Government Whips or someone else will use their influence to induce the First Commissioner of Works to attend these Debates. I was saying that Point 3 of President Wilson's Fourteen Points is:
1866The removal so far as possible of all economic barriers and the establishment of equality of trade conditions amongst all the nations signing the Peace.

I am not aware that the United States of America are going in the opposite direction. We are doing that. This country was a Free Trade country. Immediately Peace is signed, instead of taking any notice of Point 3, we begin to go in the opposite direction. That is absolutely hostile to the spirit of the only thing that will save the world from drifting again into the same disasters from which we have just emerged. Wars may often start in tariff squabbles. Only in the last Debate the Chancellor of Exchequer uttered words of warning to one of our Allies. We want to see tariff barriers abolished and universal goodwill taking the place of friction and hatred. We see the Government, instead of abolishing armies conscripting them, instead of abolishing tariff barriers, constructing them. We say, inasmuch as this policy involves that, it is a policy which is hostile to the only spirit which will save the world from the disasters through which we have just come.

During the speech of my hon. and gallant Friend I noticed that the usually pleasant countenance of the Under-Secretary of State for the Colonies (Lieut.-Colonel Amery) was suffused with smiles. He seemed to get great delight from the speech of my hon. and gallant Friend. I hope he will get even more delight from my speech, because I am going to address myself on this the first opportunity I have had, particularly to the speech that he made on the Second Reading of the Finance Bill, when he went into transports, about the heights of Abraham, Wolfe, the Empire, and so on. Before the War I was in favour of Preference. In any case I am not a hide-bound free trader or a hidebound protectionist. I believe in what is best for the country in the circumstances of the moment. We are told that we on these benches have learned nothing from the War. I have learned one tiling from the War, and it is that at the present moment this preferential idea would be ruinous to humanity. Let me first of all deal with the very subtle arguments and appeals to the higher feelings of the in-
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habitants of this Empire which were made by the Under-Secretary of State for the Colonies. He spoke about the pride of Empire, and he particularly mentioned Wolfe and the heights of Abraham. There is a new spirit in mankind to-day, and I wish to make quite clear what is this spirit. I would remind the hon. and gallant Gentleman of a picturesque and beautiful circumstance which happened during that expedition of Wolfe up the St. Lawrence River. Does he remember when General Wolfe, one of the ornaments of our race, was proceeding up that river, that he read to his officers and staff "Gray's Elegy in a Country Churchyard," and that he said:
Gentlemen, I would rather have written that poem than take Quebec.
Among the men of our race in whom the spirit of patriotism burns most brightly the love of their own homeland, their own little country village, and their own little back street in a slum is passionate, and to them all this flamboyant talk of blood and shining armour, which is practically what it comes to, and of standing foursquare to the world is most repugnant and repellant, and I will explain why.

During this War we fought and bled and mixed the best of our blood with that of our French Allies. To us an honest Frenchman is as dear as any other man in the world, second to our own kinsmen. We know that General Wolfe died the death of a hero on the Plains of Abraham. We also remember that a very gallant French General, M. de Montcalm, was killed in the same battle. After all these years we can afford to look upon those two as brothers-in-arms, though they died fighting on opposite sides, and I have myself had the honour of saluting the French cruiser "Montcalm," named after that gallant officer. A new spirit in the world has resulted from all this blood and agony. We do not want to be told that we are standing away from the rest of the world in our self-contained Empire with our tariff system. Bismarck, after 1870, said he would bind the German Empire by blood and iron. The right hon. Gentleman the Chancellor of the Exchequer, in almost identical words, quoted his illustrious father as saying that our Empire would have to be bound by blood and iron. Before 1870 the German people had many virtues. They were great musicians, great philosophers, great poets. The names of Goethe and Schiller will be respected, surely, even
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by the most blatant super-patriots in this House. The very book of fairy tales that we read in our nurseries was written by a German. They were, above all, the most home-loving nation possible, quiet-living, musical, renowned throughout the world. What has happened now? The lust, the spirit of victory, went to their heads. They won an all too easy victory over France, and they came to the conclusion that they were the lords of the world. There was no people like them. "Deutschland űber alles!" Exactly the same spirit is being preached now. This is the insidious beginning. My hon. and gallant Friend and his distinguished colleague the Chancellor of the Exchequer say it is the start. They are going to bind our Empire by blood and iron and then by trade tariffs. It is obsolete, out of date, dead, and they will find it so, and quite quickly. They may think at the present moment that this is the great hour, "der Tag." But all it will lead to will be that demands will be made, other manufacturers will want this preference, and we shall be on the slippery slope which will lead to permanent full-blooded tariffs. The hon. and gallant Member for Rotherham (Major Kelley) told us yesterday precisely what it was, and the hon. Member for Macclesfield (Mr. Remer) says that is what they are after. That will lead to a further war, and not to the new brotherhood, the new world, which we mean to get out of the League of Nations. The people who fought—not in Staff motor cars, but in small ships at sea and in muddy trenches—are determined that the War shall not have been waged in vain and that we are not going to have this blood-and-iron Empire, but that we are going to try and realise the fraternity of men—and we mean to do it. My hon. Friend the Member for Chippenham (Mr. G. Terrell), when he made his delightful speech in the Budget Debate, said that the General Election had given them a distinct mandate for introducing tariffs. I do not believe it turned 100,000 votes in the whole country. It was not the question at the time of the election. [An HON. Member: "It was a very important one!"] I do not believe it turned 100,000 votes. The question that, I am afraid, swayed the supporters of the Coalition were "Make Germany pay" and "Hang the Kaiser!" The opponents of the Coalition were probably elected on anti-militarist issues. They were distressed over the Russian policy and dig-
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trusted the Government as regards Conscription. I think that is what brought votes, and also the new democratic feeling amongst the people. They did not believe that the Coalition Government would be the best to carry it out. I do not think tariffs brought more than 100,000 votes in the country. And now to bring in this Preference, which is the beginning, as has been admitted again and again by most distinguished exponents and opponents of tariffs, and is admitted in the Budget—to bring this in now is a breach of faith to the country, and it ought not to be done unless the country is tested on the question. We are told that there is a demand from the Colonies for Preference. I do not believe it. During the War I had opportunities of talking to a good many Colonial soldiers and sailors. Having nothing better to do, we talked politics, and their politics were very different from this. There was nothing about Preference or tariffs. They talked of the future organisation of the world, of the founding of a commonwealth of all people. That is the talk of the fighting men of the Colonies. They spoke in admiration of the free institutions in England, of their natural love for their homeland, and how they hoped England would remain as she was, and would not be spoiled by being too commercialised. Not once did I hear any demand for Preference. Who are the people demanding it? Tea merchants—manufacturers. In connection with India—one of the brightest jewels in the British Crown—we are told that this twopenny Preference on tea will bind India closer to the British Empire. In all the agitations by Indians in this country, have they ever mentioned any desire of this sort? Is it suggested for a moment that the unrest in India will be in any way allayed by a Preference on Ceylon and Indian tea? The thing is not worth discussing. There is no question that it was simply a sign and a symbol. It is not going to bind anything closer to us. Our message as to this Preference on tea of 2d. a pound which is going to work such wonders in India comes at the same time, I hope, as the passing of the Montagu-Chelmsford Act, and that, when it is carried out, will bind India infinitely closer to us. I do not wish to digress, but if the Rowlatt Acts had been dropped when they might have been, it would have had a million times the effect of this Preference, of which only about one in ten thousand in India will have any know-
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ledge at all. This Preference is the beginning of the full-blooded system of Protection which is wanted, I am afraid, by the majority in this House, and they mean to take advantage of the peculiar position in which they are as the result of an extraordinary General Election. My right hon. Friend the Chancellor of the Exchequer admits it quite clearly, and for that very reason I mean to resist it, as do my friends here. I repeat that before the War I was for Preference; the arguments seemed overwhelming. But there is now no need to bind our Colonies and Dominions closer to us after what has come and gone in the last four and a half years. Anything of that sort is an insult to the patriotism of the men of this race, and to the men of India, after the loyal way in which they behaved in spite of a great deal of temptation and provocation. This, I am afraid, if persisted in, will mean the wrecking of the whole spirit that we have just arrived at as the result of the War. We do not want a defiant, fully armed Empire. We do not want this shining armour spirit at the present moment. We want to encourage other nations to open their doors and get rid of their tariffs. In particular, we hope that one result of the gratitude of France to us will be that trade relations will be easier for our merchants and manufacturers in her rich Colonies. It is not merely a mailer of the temporary triumph of the memory of the right hon. Gentleman's distinguished father. That does not matter at all. It is the question, Are we going to get a new spirit among the nations or are we going on in the same way as the German Empire went? The right hon. Gentleman the Chancellor of the Exchequer has spoken of the thankfulness he feels at being at least able to set one stone upon another in the wall which his illustrious father hoped to build. His illustrious father has a niche in history, and will always have it. If the right hon. Gentleman at this present moment, when he has the ball at his feet, would drop this idea, he would get an even greater niche, and would mark himself down as even a greater man than his illustrious father

My hon. and gallant Friend opposite has, quite rightly, I think, emphasised the fact that measures of this description are not the only bond which is required to knit the Empire together. That is common ground for everybody. But we want every possible bond
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we can get to knit the Empire together, and as one who has been associated for many years with the movement for Imperial Preference—and Imperial Preference both ways, that is to say, from the Colonies to Great Britain and from this country to the Colonies—I feel that I cannot allow this occasion to pass without putting forward some, perhaps, more practical views than those which my hon. and gallant Friend has addressed to us. He has assumed that there is no practical advantage to be gained by a policy of Imperial Preference, and he has attempted to prove his case by a reference to the Tea Duty. So far as it goes, that may possibly be. The tea preference may possibly not be one of the strongest cases that can be found in favour of Imperial Preference. But it does not follow that other cases cannot be adduced, and I hope to show the House that, taking the question on broader lines, there are very practical advantages to be gained, and that we should be most unwise, both in the interests of our Empire overseas and of our trade and manufactures at home, not to avail ourselves of them. For many years I had the opportunity of associating with that great Imperial statesman, Cecil Rhodes, who made the linking up of the Empire in the closest possible manner the great object of his life's work. For many years—even before my right hon. Friend the Chancellor of the Exchequer's illustrious father moved in this matter—he pressed this policy of Imperial Preference upon the attention both of Colonial statesmen and of the Imperial Government; and I remember well that, when he was settling the Constitution, of Rhodesia, he had a great tight with the Imperial authorities at home to allow him to insert in the Constitution of that country, in 1898, a Clause relating to the duties to be imposed. I have the exact words here
That the Customs duties to be levied on any articles produced or manufactured in any part of Her Majesty's Dominions or any British Protectorate imported to Southern Rhodesia, should exceed in amount the duties levied on such articles according to the tariff in force in the South African Customs Union.
The general effect of that Clause was that it was henceforth impossible to levy in Rhodesia Customs Duty on these articles at a higher rate than what was on the average about 12½ per cent. ad valorem. That Clause remains in the constitution of Southern Rhodesia to this day, and it was copied in Orders in Council which later
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on brought about the Constitution of Northern Rhodesia, an equally large area, and it is in force to-day. It may be said that after all that was not very much. About two years ago, in the late Parliament, I ventured to give an illustration of the working of that Clause from my own experience. I was at that time the director of a company here in London which was carrying on an extensive mining business in Rhodesia. There arose the question of placing an order for about £50,000 worth of machinery, a more considerable sum in those days than it is now. The Board took the ordinary course. They referred the question to their consulting engineers for advice. Having got the specification they threw the tenders-open to the world, and then asked the engineers to report upon the tenders. The engineers came to the Board and said. "We have been through all these, and really the choice lies between two. It is immaterial to us which you accept." The one was from an American and the other from a British firm. On the face of the tenders the lowest was that of the American firm, but it was pointed out that owing to the effect of this Clause in the Rhodesian Constitution the balance was turned to the extent of £300 to the advantage of the British firm, and they got the contract. That is a very simple instance of how quite a small advantage does affect trade to a very considerable extent. I should like to point out that in these days of large production and greater volume of trade, and where the large profits are made on the big turnover, a small advantage may have the effect of diverting or creating a very large volume of trade.

I cannot see, for the life of me, how my hon. and gallant Friend opposite (Captain Benn) and other people who oppose Imperial Preference can resist the logic of such facts. I cannot see that it will create any ill-will in the Empire and I do not see why it should arouse any ill-will among foreign nations. We have been repeatedly told that we are imperilling the League of Nations if we change our attitude in regard to tariffs, and that we shall be arousing hostility if we take measures in the interest of our own Empire. I can never see why, if that argument is true, it is not equally true of tariffs imposed for preference given by the great country across the Atlantic, America. It does not arouse any ill-will here if she changes her tariff. If we choose to do what we think right, are
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we to be told that we are imperilling the peace of the world? I cannot follow that argument. The policy of Imperial Preference is really on a large scale an illustration of the sort of policy that in France allows the octroi. If it is defensible as a means of raising revenue or otherwise to allow a town to charge duty on goods entering its domain, I see no reason why, in the case of the Empire, tariffs which are paid on the entry of goods should be wrong.

I do not think that is the issue. If for our own convenience, and that of other portions of the Empire, tariffs seem to us to be advisable, that is our own domestic concern, and if in the fixing of those tariffs differences are permitted, that again is our own domestic concern with which no one but ourselves has anything to do, and which ought not to arouse any controversy or ill-will in any territory outside the Empire. I congratulate my right hon. Friend the Chancellor of the Exchequer upon the courageous attitude he has taken in this great juncture in our Imperial affairs. I welcome it on every possible ground. I am delighted that the son of a great statesman, who did so much for the cause of the Empire, should have had an opportunity of contributing his part to the building up of the great edifice which his father commenced.

Mr. G. MURRAY

I intervene in this Debate because I have had a great deal to do with this question of Imperial Preference. First of all, I should like to join issue with the hon. and gallant Member for Hull when he stated that the Government had committed a breach of faith in bringing Imperial Preference into this Budget. In doing so he impugned the good faith of practically all the Coalition Members who were returned to this House. I do not know whether he intended to do that, but I should like to say for myself that I do not think a single day or evening passed during the General Election in which I did not bring up this subject of Imperial Preference, in which I did not discuss the question of the Trade Industries Board, and in which I did not raise the whole issue of the dumping that went on before the War. Not only that but in the joint manifesto which was issued by the Prime Minister and the Leader of the House it was very definitely stated that they were committed to this prin-
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ciple of Imperial Preference!, to anti-dumping, and the Trade Industries Board. I am at a loss, therefore, to understand how the hon. Member has the effrontery to charge this Government and the members of the Coalition with a breach of faith.

The hon. and gallant Member did say a breach had been committed. It is true he subsequently informed the House— I do not know from where he got the knowledge—that the election had not been taken on this question in any way, and that there were only 100,000 who voted for it in the election. I listened to my hon. and gallant Friend the Member for Leith Burghs, who in the course of his very eloquent remarks informed us that our policy before the War was not reprehensible because it; was a guarantee of the peace of the world. What was the effect of our policy before the War? Did it prevent the greatest war that has ever taken place?

The hon. Member says it might have done so. We are dealing now with facts, not with possibilities. We know that the War did take place in spite of the fact that we had Free Trade, and what are described as the blessings of Free Trade.

I do not suggest that we should not have had the War, but I do suggest that the argument of my hon. and gallant Friend is founded on wrong promises. I have listened not only in this Debate but in others to various arguments which have been adduced as to the effect that the institution of Imperial Preference would have upon foreign countries. In 1912 there was set up a reciprocity agreement between Canada and the West Indies, in which I am proud to say I took a considerable part. One of the main arguments advanced against that agreement was that the United States would take exception to it, that the United States would take offensive action, that this offensive action would affect our trade in the West Indies, and that the West Indies would suffer tremendously. A certain number of merchants and business
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people in the West Indies believed in that argument. Their trade had for half a century or a century been carried on with the United States, and, being naturally of a conservative nature, they did not like the idea of having suddenly to transfer that trade from the United States to Canada. Notwithstanding these arguments, the West Indies and Canada decided to go ahead, and the United States carried out none of their threats. How could they do so? On the other hand, quite a number of agents who were carrying on trade in New York with the West Indies transferred their agencies or set up fresh agencies in Canada, and so fresh British trade was created. Why was it that the United States was unable to take any aggressive action? It was for the simple reason that they had got exactly the same principles themselves. Puerto Rico is in the United States Customs Union, they give a Preference of 20 per cent. to Cuba, and in Hawaii they give a Preference. They are within the family circle, and so it was impossible from the point of view of a great nation for the United States to take any aggressive action, because we in two parts of our Empire came to an agreement. What about France in this connection? What docs Franco do to her Colonies in this way? Does not France give enormous Preference to Martinique, to Guadeloupe, to Senegambia, and such a Preference that we are unable to trade there in any of the articles in which they actually give Preference? [An HON. MEMBER: "We should go to war with them!"] Yes, we should go to war with them, according to the arguments of the hon. Members opposite. I admit that the hon. Members opposite take a very broad view and a very wide vision of this matter, but they have got to look at the question from the point of view of facts and of human nature, and I submit that if you can get the United States to deal with her Dependencies and Possessions in the way that the hon. Gentlemen opposite wish to deal as between the United Kingdom and our Dominions and Colonies, and if you can get France to do the same, and Holland, and Italy, then, I say, you will have made out an extraordinarily good case, and I am not sure that I would not follow you; but you cannot. You have been trying for years and centuries—

My hon. and gallant Friend told us that at the beginning of the War he was in favour of Imperial Preference. I am a great admirer of that service to which he has belonged. I know that service very well, and I have come across them in many parts of the world. I have lived in Australia and in South Africa. I have travelled in Canada, and I know the points which my hon. and gallant Friend has discussed this afternoon, and I was surprised to hear him say that he had not come across any Dominion or Colonial soldiers who had any belief in this question of Imperial Preference. That has not been my experience. My experience has been that in the Colonies and Dominions there are thousands of men and women who desire these closer trade links with the Mother Country; but they have not taken up a selfish attitude, and said, "You give us this or that," but they have invariably said, "What we do desire is some form of Imperial Preference. It does not matter how little it is, but give us something to show that you will meet the advances which we have made in the Preferences which we have already given to you." That is the view that I have formed from my associations with these places, and I was surprised, I might almost say pained, to hear the hon. and gallant Gentleman talking as he did, because I think he must have forgotten, in the course of the last four years, or just before he became Member for Hull, all his experiences in the Dominions and Colonies, for I assume he travelled there in His Majesty's ships. I only hope that the atmosphere that has been and will be created by this Debate will revive some of the memories in his mind or some of the memories of his more youthful days.

I would like to mention the question of sugar. In our West Indian Colonies sugar is the most vital problem they have to deal with. For years, certainly for the last forty or fifty years, the sugar estates have languished because of the prices they were able to obtain for that article. For years they have asked the Mother Country to give them a Preference in sugar, in order that they might secure a permanent market and revive that industry. I, for one, on those grounds alone, welcomed most cordially the proposals in the Budget of my right hon. Friend, because I know this perfectly definitely, after a residence of eight years in the West Indian Colonies, that if that
1877
Imperial Preference is not granted there is nothing left for it but for the West Indian Colonies to turn their eyes towards the United States, who would be perfectly willing to grant that preference. That is the position is the West Indian Colonies. It applies also to Mauritius, it applies in a lesser degree to Nigeria, and those other Protectorates for which we have responsibility, and I hope that the supporters of the Government, all the Liberal Coalitionists as well as the Unionist Coalitionists, will go into the right Lobby every time-that is into the Government Lobby on this occasion. I do not say I have not been in the other Lobby, but on this occasion the Government Lobby is the right Lobby. I hope they will support Imperial Preference, because I believe that by this means the different parts of the Empire will be drawn closer together, and that it is only in that way that we will be able to maintain and to consolidate the Empire for which so much blood and so much treasure have been expended during the last four years.

I think it is just as well that we are putting on the Statute Book something which shows this House is taking an interest in Imperial affairs, and in my view the proposals of the Government on this occasion are welworthy of general support irrespective of party or pre-war beliefs. I am surprised to think that anybody in the course of this War has not learned at least to appreciate more than in the past the necessity of looking upon the British Empire as a household, each member wherever he exists having an interest in Its welfare. The hon. and gallant Member for Hull (Lieut.-Commander Ken-worthy) said he had on occasion talked politics with Colonials, but I venture to say that I think I know who did most of the talking. I happen to have had some acquaintance with Colonials, and during the War I was Agent-General for one of the States of Australia, and I suppose I met at least a hundred Colonials to every one that the hon. and gallant Member could have met, and very naturally we perhaps talked more intimately of affairs as between the Mother Country and the self-governing Colonies, and if we were to approach the question of Imperial affairs, I think I am right in saying that the usual comment coming to me from visiting Colonial soldiers was, "I wonder what the old women in this
1878
country will do after the War: Will they do the same as they did before the War, or will they learn something and appreciate what the Empire means, and have something to live for, to work for, and. if necessary, to fight for?" It is said by the same hon. and gallant Gentleman that this really was not asked for by the people of the Dominions. I presume that we believe in Parliamentary institutions —sometimes I doubt it, but we will assume that— and, if so, I think the hon. and gallant Gentleman must take notice of the fact that representatives of all the self-governing Dominions and India have made the request formally to the British Government to establish Imperial Preference. It must be assumed that those gentlemen who attended the Imperial Conferences were speaking on behalf of, and knew the wishes of, the people whom they represented, and this House can only, I think, if they wish to delve into that aspect of the question, accept the representations which have come at Conference after Conference from all the Dominions of this Empire. Therefore, I think it is unnecessary to argue at all the point as to whether or not Imperial Preference has, as a matter of fact, been asked for.

The practical results from the proposals in this Bill may not be very great, but, none the less, it is a valuable step, and it does an infinite amount of good in establishing a true Imperial atmosphere. This Imperial Preference, once it is accepted in even the slightest form, extends much beyond the mere lettering and figures in this Schedule. [Cheers.] Hon. Members who cheer will not cheer in a moment when they appreciate what I mean. I have had experience in Australian Governments as a member, and I know that it was the policy of Australia in its tariff system to give a preference to British manufactures. The Australian Governments are by far the greatest purchasers and importers of British goods in Australia, because State activity there is so extensive, and it was the invariable practice, in conformity with this atmosphere which I have talked about, to consider most favourably British tenders, even beyond the statutory preference given. Where the margin, as between a British and a foreign tender, has been rather in favour of the foreign tender, but not a very great amount, the Australian Government, for instance—and I think this applies to other self-governing Dominions —have not hesitated to jump that margin,
1879
in addition to the statutory preference, and that, I am sure, has been all bene-[...] to the manufacturing industry in this country, and was well worthy of the action of the Dominion Governments in question.

It is said that this Imperial policy is hostile to the world spirit of to-day. To take that vision one escapes all the facts and looks beyond into the rainbow in the clouds. [An HON. MEMBER: "Hear, hear!"] Any hon. Member who will say "Hear, hear!" to the proposition of missing all facts seems to me to be an impractical politician. I think this world spirit to-day as regards tariffs, as regards the policy of looking after oneself, is evidenced by the fact that we are practically the only country in the world which carries on what is supposed to be Free Trade. The world spirit, if it is anything at all, is to look after one's home market and to develop that, and as to this being in conflict with the world spirit requiring a greater brotherhood, I do not think there is the slightest evidence before us throughout the War, and since the War, to indicate that any other country is proposing to take a step away from some form of Protection or tariff system. Personally, I am not a very great protectionist, as perhaps some other Members are. None the less, if I were a free trader out-and-out, I think I should have to recognise the fact that the world spirit lies in the other direction. It is said that we must have Free Trade to guarantee the peace of this world. If that is so, I fail to see why this country should remain the sole guarantor of the peace of the world. That is really what it means. It is said that we should go on giving the rest of the world an opportunity of coming to our views. Surely the world has had the example before it long enough, and I presume that it has watched the example, and apparently it does not think that our example is one which is beneficial to the development of any given community or country.

Then the hon. and gallant Gentleman who introduced the Amendment complained that the proposals of the Government conflicted with President Wilson's Fourteen Points. I think we profit a great deal in this country from the fact that we live under an unwritten Constitution, and I should be sorry to add to it President Wilson's Fourteen Points. If
1880
we were to accept the article against the establishment of economic barriers in its full sense, I think President Wilson would be committing something of a fraud on this country, because he would be preventing us from doing something that already exists in America, and apparently there is no obligation on his part to remove the economic barrier established in America. That country is to continue under what it thinks a beneficent system, while we, under the Fourteen Points, arc never to be allowed to follow its example. It seems to me to be an extraordinary suggestion, and I think it is completely knocked over by the fact that President Wilson had himself hurriedly to explain to the United States what he meant by that particular article of the Fourteen Points, and to make it perfectly clear that it necessitated nothing in the direction of altering the tariff system of that country. If that is so, there is nothing in the Fourteen Points which necessitates our remaining rigidly tied to the tariff system as we know it in this country. Then it is said that this Empire policy is out of date. I recall that it was out of date before the War, too, and there never was a time when it was not out of date, apparently, with some people who can look a tremendous distance, but never, in their view, can capture the idea of an Empire standing for such magnificent ideals as the British Empire stands for. Without labouring the question any further, I do personally appreciate very much the fact that we are for the first time in this country establishing on the Statute Book the fact that the British Empire is a domestic concern, and that each and every part of it is interested in every part of it.

We have listened to very interesting speeches in the course of this short discussion, and I think not the least interesting contribution to our Debate has been made, as is natural, by a gentleman who has spent a considerable measure of time in the Dominions and Colonies oversea. But I confess I am a little disappointed to find that the hon. and gallant Gentleman who initiated the Debate takes up the discussion of this question exactly where we left it before the great struggle from which we have emerged. He has forgotten nothing. Not one of the old arguments is missing. He has learned nothing. Not
1881
one of the new facts is recognised. He stands exactly where he did. Mr. Asquith has assured us for himself that that cannot be the case. I do not wish to quote his speeches, but at least I could have hoped that among his small and distinguished following in this House we might have received some recognition of the necessity for an advance and a new orientation of our policy such as Mr. Asquith recognised as resulting from this great struggle, and the dangers revealed to us in the outbreak and the course of that struggle against which he thought it necessary to guard. I cannot make the same reproach against the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy). He frankly has changed his views completely. He was a preferentialist before the War, but the War has had the result on his mind of converting him to an ardent and antipreferentialist. I hope I do not do an injustice to his argument. I did not hear the whole of his speech, I am sorry to say, but I did hear this part. It appeared that before the War he was anxious lest in the day of trial the Empire should not be found wholly united and animated by a single code. Therefore, before the War he was anxious to take any measure which might tend to promote such union and secure the assistance and common action of all parts of the Empire if the great struggle came.

I am not quite certain if there are not merits in the old maxim that charity begins at home. But, accepting the hon. and gallant Gentleman's description of his own mind, he moves easily in terms of humanity. Lesser people are content to move on a lower level, but, perhaps, after all, they may get as far. I continue my summary of the hon. and gallant Gentleman's argument. Before the War he thought in terms of Empire, and was afraid that the Empire might not be found united and animated by the common purpose when the day of Armageddon came. He, therefore, supported every measure by which he could unite them, and, therefore, he was in favour of Preference. He thought that Preference would help to unite the Empire, not like the hon. and gallant Gentleman on the Front Bench opposite who thinks it will be a force of disunion. But
1882
now see the further step in the development of the hon. and gallant Gentleman for Hull. Having found that during the War that happened which he did not venture to expect, and that the Empire did join with us in the common sacrifice, and bore their full share, ho says there is no use and no reason for paying the price now which he would gladly have paid before. Is that going to be the attitude of the House? Is that going to be the lesson we draw from the co-operation which the Dominions and British communities in every part of the world gave to bring the War to a successful conclusion?

I am speaking of the British Empire. I hope the hon. Member does not think when I am speaking of the British Empire I am discourteous to the Allies if I do not diverge every moment to say that the Allies have also taken their share. I ask the Committee just to recall the issues. The hon. and gallant Member for Hull says there is no further need for Preference, since we have got all we want from the Dominions, and he has returned to humanity and has ceased to think about the Empire. The hon. and gallant Member on the Front Bench opposite says there is no occasion to think about this because the Dominions were perfectly content with our own policy, and had no desire for a change. What is his authority? He has none. The Dominions have again and again disclaimed any desire to interfere in our domestic controversies, or to ask for themselves anything from us which we thought it injurious to ourselves to grant, or which we thought re-acted adversely upon our own people. They have disclaimed that idea, and they have practically, repeatedly, and unanimously said that when we have settled our own tariffs in accordance with our own ideas and to suit our own needs, we should then embody in those tariffs a system of Imperial Preference. I want to put the matter quite fairly. May I just recall to the House how old this request is, and how unanimously it has been accepted by the representatives of the Dominions overseas?

The first man to propose it was that great Dutch leader, Mr. Hofmeyr, at the Conference in Paris. The first man to carry it into effect was the Leader of the
1883
Liberal party in Canada, the late Sir Wilfred Laurier. He carried it into effect in spite of threats, with the help of Canada, single-handed, against the aggressive action of our late enemy, Germany— action taken in order to prevent, or to punish, Canada for having done it, and to deter other portions of the British Empire from conceding a preference to our goods. At other Conferences, Imperial and Colonial, for years past, this question has been raised. At every Conference but one it has been carried with the representatives of the United Kingdom alone dissenting. At the last Conference it was carried with unanimity, the representatives of the United Kingdom assenting. It is really idle to say that after that long experience which men of both parties, or of all parties, have had in the different parts of the Empire over a long course of years, maintaining the same attitude in spite of the changes of Government—it is, I say, idle to say that there is no desire on the part of the Dominions that we should take this action if we can take it consistently with our own interests. The hon. and gallant Gentleman (Captain Benn) considered it inconsistent with our interests. We think it consistent, not only with our own interests, but in the highest interests of our own people, that this should be done. The hon. and gallant Gentleman the Member for Hull (Lieut.-Commander Kenworthy) made a suggestion that had no countenance in the speech of the hon. and gallant Member opposite (Captain Benn), that the Government had no warrant, and that the country had no knowledge of their intention; that the verdict at the last election was taken on another issue, and that, accordingly, we were acting ultra vires, so to speak, when we ventured to do such a thing.

Those of us who have had the longest experience of politics would be, perhaps, the least ready to define exactly the issues which the voters have in their minds, and on -which they gave a decisive expression of opinion, in the course of a General Election. But I think I may say this, that, generally speaking, the view of the representatives of the two, or more, parties, or of the different parties, is whether for personal or public reasons that on the whole it is desirable that thin or the other set of men should be charged with the administration of affairs. Personally, if the truth is to be told about the last
1884
election, it might not be very flattering to many of us. But if you want to crystallise in a sentence what the country did, it was to express confidence that the Prime Minister was the proper man to handle the difficulties with which we were confronted. It then becomes of importance to know what the Prime Minister said to the country as to the things he was prepared to do. Just let me read two or three passages from the address which the right hon. Gentleman and the Lord Privy Seal issued to the electors:
The country will need all the food, all the raw materials, and all the credit which it can obtain, and fresh taxes ought not to be imposed on food or upon the raw materials of our industry. At the same time a preference will be given to our Colonies upon existing duties and upon any duties which, for our own purposes, may be subsequently imposed.
Could you have a more explicit, a more definite declaration of the policy which we are pursuing? Would it not be more true to say that if we do not now propose a preference on existing duties we should be breaking faith? To suggest, after the clear warning in the election address issued by the two leaders of our party as the basis of the mandate which they sought to suggest after that clear declaration in that address that the electors did not know what they were voting about, and would never have voted the way they did if they had had this question in their minds, is surely futile!

Yesterday the hon. and gallant Gentleman opposite made a charge against me which left me speechless. He said that I did not answer his questions. That really touched me because then it appeared that I distinctly failed in what I had tried to do. I had better try to deal with his points now. I hope I shall satisfy him. Whether my answer convinces him or not, at any rate, I shall try fairly to meet the points which he has put. I have dealt with the first, in which be contended that there was no Dominion's demand for Preference. Then he said that with the limited duties which are at present the subject of Preference the incidence of Preference is necessarily unequal as between the different parts of the British Empire. Some derive a greater advantage from Preference than do others. This he considers must arouse irritation and discontent in the Dominions which receive little or less than their share of advantage. By what right does the hon. and gallant Gentleman assume to himself the duty of making this statement
1885
on behalf of the Dominions, none of whose representatives have made it for themselves. They have never claimed, whenever they have asked for Preference, and never suggested, that it would be possible for us to make the Preference in such a form that each Dominion got exactly the same benefit from it as any other. They have never taken that short-sighted, commercial view of the proposal. What they have asked is that we shall recognise the claims of kinship, and the unity of the great Commonwealth of Nations which compose the Empire. They are not going to look at the matter too nicely so long as we admit the principle and give a Preference where we can in accordance with our own fiscal system, whether or not somebody gets more out of it than do others. The hon. and gallant Gentleman says that this is the thin end of the wedge. I have only one answer to that: that Parliament and the people of this country may hereafter decide. I do not mind what measure you speak of or what expenditure you undertake, if it is found good in the eyes of Parliament and the country it is the thin end of the wedge ! It leads to more ! The thin end of the wedge argument only comes to this—we have all used it!—"I do not like what you are doing; I like still less what you may do hereafter." That is an attitude of mind adopted and equally applicable to every proposal that comes before the House. The hon. and gallant Gentleman says, "If we consent to give a Preference on any of these duties, we lose freedom of action in our own fiscal system." I say quite plainly that one of the factors, in considering whether or not it is desirable to abolish a duty at any given time, would be whether it was effective and useful in connection with our system of Imperial Preference. The hon. and gallant Gentleman says, "The hands of the House are tied and the Liberal free traders will hopelessly compromise themselves." I think the hon. and gallant Gentleman is again misunderstanding and therefore misstating the whole attitude of mind of the Dominions statesmen and the Dominions people. Just as they do not ask that we shall put duties on which we do not find it expedient to put on for our own purposes, so they have never asked that we should keep duties on after we have found it expedient to take them off. What they have asked, and what we have agreed to, openly
1886
agreed to, before the last election, is that where we have a duty, and so long as we have that duty, we will give a Preference. That leaves the House free to abolish the Preference to-morrow, as free as the Dominions, when face to face with our own people.

Lastly, the hon. and gallant Gentleman was reinforced in his argument in this matter by the hon. and gallant Gentleman the Member for Hull, who complained that the step we were taking was hostile to the world-movement of the hour, and more particularly to the third of President Wilson's Fourteen Points. I think that President Wilson has sometimes wished that he were allowed to explain his own points, and not find so many people ready to explain them for him. It has already been pointed out that the present practice of the United States is a practice we are asked to establish here, namely, that within our own boundaries we should give a preference. The practice of the United States was further alluded to by an hon. Member who quoted the case of Cuba. But Cuba is not part of the United States. Yet the United States gives a preference to Cuba. Is it not perfectly clear that President Wilson had no intention of denouncing the policy of his own country, or that he intended to reverse it. Therefore, those who misinterpret this one of President Wilson's Fourteen Points, who contend that the acceptance of it is any bar to what we are doing now. No, Sir, I am quite certain that President Wilson's Fourteen Points do not suggest that any country has no right, or would not continue to have the right, to differentiate between its own citizens and the citizens of another nation. What, he may have desired, and what I think he did desire, was to lessen the amount of discrimination, or to abolish the discrimination, with which one country treated foreign countries as compared with one another. That is a totally different thing. Part, I think, of the failure of the hon. and gallant Gentleman to recognise the lessons of the War, or to make any advance now from the stage the controversy had reached before the War broke out arises from the fact that he cannot conceive, or will not conceive, of the British Empire as one people. It has been suggested that you must not treat Yorkshire or Scotland better than a foreign country but even the hon. and gallant Gentleman opposite would be the first to say that that was absurd.

There is a great deal to be said for Free Trade with the whole world when you can get it. [An HON. MEMBER: "You cannot get it!"] I would like to see Free Trade within the Empire to-morrow, but we cannot get it. [An HON. MEMBER: "Why not?"] Well, it does not depend upon us. If it did, I think we should have it to-morrow; and I will go further and say that, as far as I know the minds of Liberal free traders before the War, I should not think there is one of them who has not said at one time or another that he would gladly have Free Trade within the Empire, even at the cost of small tariffs against other countries. But it does not depend upon us, and the fiscal conditions of the Dominions do not admit of it. To say that what we do within the British Empire is a matter which concerns foreign countries, in which they have a right to offer remonstrance or complaint, I will not say to threaten, seems to be a denial of that for which we have fought and suffered in common and which has been solemnly sealed by bloodshed.

It is true Preference has been given in the ease of the duties now in force, but it is a very small one. Measured in money, it is very small; although measured in potentialities within those limits it may be considerable. It may, however, and I think it will, just give the stimulus to development which may mean the difference between early and late development, and between poverty and prosperity, in many of our Dominions. I do not justify it on the ground of its tangibleness at this moment; I do not justify it on the ground of the development it will lead to, nor on the ground that if you approve it in respect of these duties you will some day propose other duties and extend it to them also. I justify it as a spiritual recognition of a spiritual unity. It is something for which all the Empire has asked. For that reason and not because of the profits they get out of it, it is justified. The last five years will have been wasted after that great struggle and those great sacrifices made in common if we could not make this spiritual recognition of the great bond of union which embraces us all.

We have just had a new definition of the character of the proposals of the Chancellor of the Exchequer. They are a spiritual recognition of the sacrifices of the common Empire. This has been placed on many grounds before, but to my mind that is the most unsatisfactory of them all. If it was a mere sentimental recognition for the time being, and a sort of testimonial, so far as that is concerned £2,000,000 or £3,000,000 would not matter. My right hon. Friend will forgive me for saying that while I am quite certain he was sincere in his peroration, he is a practical man who has devoted a large portion of his life to changes in our fiscal system which he desired, and I think he will at once admit that whatever the sentimental ideas there may be about them, he has in his mind the idea that they are going to be of great practical benefit to the people and to the Empire.

But let us get back to business on that. First of all, I should like to say something about the election pledge that the right hon. Gentleman quoted. I hope I shall never take particular objection to the actions of any Government when they are challenged as to what their mandate was or was not. Personally I hold the view which Lord Morley has often expressed with regard to that, namely, that people elect a certain Government and they must take the consequence of the acts of that Government, and of what they deem to be right in the exercise of their authority until the next election comes. I have very little sympathy with the mandatory theory, and I believe myself in the authority and responsibility of the Government of the day. In so far as that election pledge is concerned, I may be forgiven for saying that it was part of the deal between the Prime Minister and his Unionist colleagues as to how they should run their election campaign, and my right hon. Friend will be the first I am sure to admit that it is in no sense binding on us. So much for my view on the question of the election. I do not think the people of the country were bothering at the election one little bit about Preference, for I think they were swept off their feet by an election which was taken under conditions which I have often described, and which I will not repeat, for it really has nothing to do with this question at all.

I do not complain at the introduction of this measure as it is, because they had the authority, and let them exercise their
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responsibility and take the consequences. There was another point which my right hon. Friend made more than once, and it was the effect on the Dominions of such a system as this. There was no question more keenly fought, out during the years from 1900 onwards than this very question, and in the year 1906, as far as the people of this country were concerned, it will be admitted at any rate that those proposals met with definite rejection by the electorate at that time. One would imagine from statements given us to-day that the result of that had been some falling off in the bonds of affection and loyalty between other parts of the Empire and the Mother Country; but when the day of trial came, at the start of the last War, was there any lack of loyalty or affection or devotion on the part of the whole of the great Dominions? Not at all. It had no effect whatever on them; and it was only a corroboration of the idea and the position they had laid down all along, which my right hon. Friend quite clearly stated here to-day.

The position of the Dominions was this: "Questions of Preference and of tariffs are your business; it is for you to decide what you shall do." But they went further, and again I admit the Chancellor of the Exchequer most fairly put the position, which was, "If in your opinion any of the preferences you give to us bear hardly upon your people, either commercially or socially, we do not want them." The suggestion is that the proposals here to-day will not bear with undue hardship upon our people, but the reaction that must come is one which ought to be very carefully considered. In any event, we stand to lose £3,000,000 over this proposal. On the whole, I know this is trifling compared with the magnitude of the whole scope of the matters we have to deal with. I quote with much agreement what Mr. Joseph Chamberlain said in regard to the suggestion put forward as to what might be done on a minor scale with regard to Dominion Preference:
It is no good fiddling with these little things. They are of no value from the major point of view. Colonial preference means taxation upon food, upon corn, and upon other commodities which the Dominions send here in large quantities, and in regard to which they compete in our markets with foreign countries.
6.0 P.M.

Of course we know, and there can be no element of doubt in it, that what this must allude to is taxation upon corn. It is taxation upon wool, timber, and the
1890
whole range of raw materials which are supplied to us, and inevitably from these [...] beginnings must come the great fiscal scheme which will, as we think, inevitably lead to large additional burdens, being placed upon the people of this country, and especially upon those people who are least able to bear the burden. That is our case against these proposals. We are obdurate and obstinate, I know, and I dare say we are considered prejudiced, but that is the view we hold, and that is the view which I have not the least doubt that tariff reformers throughout the country and in this House will agree is their policy. We hold that view with conviction and force to-day, as we held it in the early days, and I think that substantially tariff reformers will agree with us that this is the first step towards a complete system of Dominion Preference which does mean taxation upon food and raw materials which we desire should come to 'this country at the cheapest possible rates. The present Leader of the House, the Lord Privy Seal, has over and over again stated, and I think I may repeat his words here once more, that preferential trade and the taxation of foreign manufactures are part of one idea, and the adoption of one will inevitably lead to the adoption of the other. It certainly will. The right hon. Gentleman opposite said a word or two as to what Mr. Asquith has stated during the War, and rather suggested that we were not in line with him. I do not know whether the right hon. Gentleman has studied any of the speeches made in the country by the Leader of the Liberal party; if he has he will know that Mr. Asquith criticised and condemned these very proposals of the Chancellor of the Exchequer in no uncertain terms. What we say in regard to the whole of his statement is this: we are setting up a machine here and now for all these preferential arrangements, whereby we can tax the manufactured article and whereby we can start the taxation of articles of food, and when you have got the machine going, why, of course, it will proceed. That is exactly what my right hon. Friend and the tariff reformers throughout this House aim at. It is what they have fought for all these years, and if they can get some of those who used to fight with us in the old days on the Tariff Reform platform, and in these Houses of Parliament, I congratulate them on their capture. To some minor extent we may regret our loss, but
1891
we shall goon, and it is for them to make up their minds and to take their own line. But let there be no mistake about it. It is a very difficult position for them. The issue is whether by setting up this machine we recognise that we are definitely committing ourselves not to these rather trifling duties, although they are costing us £3,000,000, but to the whole system of Preference, which means taxation upon food and upon raw material, and, as the Leader of the House has said, the whole range of the taxation of foreign manufactures is part of the one idea.

I sympathise very much myself with what has fallen from hon. Friends this afternoon, notwithstanding the very vigorous criticisms of the Chancellor of the Exchequer. I think it is a pity, when we are moving out into a fresh range of ideas, that this country should be departing from its traditions of Free Trade. It is a wrong time to do it; if ever there was a wrong time, this is the wrong time. It is a time when we might have hoped that the smaller ideas of the true progress of the nation might be enlarged by the wider scope of the free interchange not only of ideas, but of the products of each nation. My right hon. Friend said definitely that he would welcome Free Trade in the Empire and all the world over. Is it the way to approach that ideal to give up our hold on Free Trade and our practice of it? Surely not! Surely the right way is to hold on to what, on the whole, this country has done well under. The entry of this country into the War financially was an entry on a financial basis approached by no other nation. We have borne the burden without Preference within the Empire and without the taxation of manufactured articles, and that national burden has been carried by this nation in a way which not one of the greatest financiers within the bounds of the British Empire or of any other country would have deemed us capable of. I say the system of Free Trade without Preference, under which we have worked so well, was largely responsible for the financial strength of this country at the beginning of the War. We are beginning to change that system now. Those Gentlemen who advocate that change must discharge their responsibilities to their consciences and to their constituents, but when they are voting for the commencement of a new system they should know
1892
that they are deserting the old path along which, on the whole, we have worked so well, which has meant so much for us and which has in no degree—and I say it with such knowledge as I have—led to any slackening of the bonds of Empire, which have been tested, time and time again, and proved true. We are departing from the old path on a career which I think is retrograde, and is not in accord with the spirit moving the world. What the result will be I cannot say, but as far as I am concerned, I feel justified on every ground, on the history of past experience, on the experience of people throughout the War—I say I feel justified in voting for the Amendment of my hon. and gallant Friend.

The object I have in asking the indulgence of the House for a few minutes is to assure the Chancellor of the Exchequer that he will be making a great mistake if he bases his hopes on any idea that the speech of the hon. Member for St. Rollox (Mr. G. Murray) truly represents the views of the Coalition free traders. The difference in the position of the hon. Member for St. Rollox and myself is this. Whereas that hon. Member considers he has been bought, I consider I have been sold, and I propose to prove that to the Chancellor of the Exchequer under three heads. I am going to say, first of all, that there is not an intelligent elector in this country who, if he had it put before him that the first effect of the proposals for Preference of the Chancellor of the Exchequer would be to deprive the Revenue of £3,000,000 a year, at a time like this, would not have held that he would be wanting in his duty if he supported the right hon. Gentleman. The second reason is to be found in the nature of the right hon. Gentleman's speech in introducing his Budget, in the nature of the speech he has delivered during this Debate—a speech which I took to be a challenge, and a very provocative one—in the nature of the speeches of those who support him, in the cheers which greeted him in certain quarters, and in the observations we hear passing between his supporters. These make very clear to me my position as a free trader. Thirdly, I am going to oppose this on this ground: that the present condition of trade in England, which is being justified by the Chancellor's policy, will be perpetuated, and will impose an intolerable
1893
burden on the community, and that it confronts us with grave social difficulties at no distant date.

I want to say a word or two with reference to the right hon. Member for Peebles (Sir D. Maclean). I think the right hon. Gentleman is very unfair to the Coalition Liberals. He talks of us always, and so does his Press, as not representing true Liberal sentiment in this country. I venture to assert that Liberalism in this country represents at least nearly one-half of the considered judgment of the British electorate, and it is not proper to suggest that the expression of Liberal opinion is confined to the right hon. Gentleman and those who sit with him—the forty-four, or forty-three, or forty-five members of his party. Rein ember that of that small number over thirty were returned to Parliament because they pledged themselves to support the Prime Minister in carrying out his programme; otherwise they would not have been here, and if the right hon. Gentleman is going to stand at that box and make appeals for a new patriotism, he should appeal to those who have always been associated with the cause of which he now claims to be the leader. His attitude reminds me of the story of a man who died and went to heaven. He was shown around by St. Peter, and expressed extreme satisfaction with what he saw, but he missed the members of a certain small community which I will not name, because some are to be found in my own Constituency. I will call them the spiritual Wee Frees. He asked Peter why there were none of them there, and Peter replied. "Come this way." He took him up a hill, and when they got to the top, enjoined silence upon him. Looking down he noted a little company praying and singing, and he asked Peter, "Why did you want me to be silent when I was brought here?" The answer was, "I did not want you to disturb them; they are the only people here." That is exactly the position which the right hon. Gentleman takes up.

I have listened to the arguments of the Chancellor of the Exchequer with great and growing amazement. I do not know if there is any possibility of the Free Trade mind and the Tariff mind getting into real contact with each other. I quite appreciate what the Chancellor of the Exchequer said yesterday to my hon. and gallant Friend the Member for Leith (Captain
1894
Wedgwood Benn), that it was no good trying to find accommodation between them. No accommodation is possible, it cannot be possible after the speech which the Chancellor of the Exchequer has delivered to-day. He said that we had nothing to learn from the War! Fancy that argument lying in his mouth. And then he turned to the hon. Member for Hull, and twitted him with having been originally Imperialistic because he thought the British Empire could not be kept together without tariffs. He said my hon. and gallant Friend was surprised that the Empire had remained united. But surely it was the Chancellor of the Exchequer who did not expect the Empire to remain united. I remember the argument advanced in 1903 not only by the right hon. Gentleman, but by his father, and by others who thought with him, and one of the main arguments was that the British Empire must be cracked asunder without tariffs. I remember one speech I heard his father deliver in Birmingham, and I heard the first he delivered in May, 1903, in which he likened the edifice of the British Empire to the old Campanile in Venice. He said how people looked at it. It had been there for so many years and looked as if it was a permanent structure, but there were cracks in it. The wise men warned but the foolish men would not heed, and the structure which had stood for so many hundreds of years came tumbling down the ears of the astounded citizens. So it would be with the British Empire unless they put it on a cash basis.

Why does not the right hon. Gentleman apologise to the country for having advanced an argument in 1903 which has proved to be one of the most foolish calculations ever made by a statesman in 1914; and why does he not further apologise to the House for using it to-day? Every time this argument is used the right hon. Gentleman insults the British Empire. He tells the British Empire that unless it is given a monetary grant, unless the people of England are to be heavily taxed —this year only £3,000,000 but more to come—the Empire we all love will break apart. It is not we Liberal free traders who are lacking in love of the Empire. It is the school of thought represented by the Chancellor of the Exchequer, which says, "Without giving them something for nothing and without giving them something in cash, they will break away and will cease to care for you!" What did
1895
he finally come to, to answer his own argument? He said this was a spiritual recognition of a spiritual unity. Why disturb the unity by bargaining in terms of cash? What is the matter with the British Empire? The right hon. Gentleman says we should take steps to unite it. It is united, as our enemy found to its cost. He talked about the great day of Armageddon. Was there any more wonderful spectacle seen in the history of the world than what happened to the British Government on the day of Armageddon? He went on to refer to bloodshed. Was this blood shed because our trade policy was not satisfactory, or because if it was shed we should have a more satisfactory trade policy? Have we really no ideals? Is this the way to talk about the sacrifices of these men who came from far parts of the Empire? Give them Id. on a mouth-organ, 2½d. on a motor-oar to a South African who does not make it, or 3d. on a film to an Australian who does not make it, or 4d. on a clock to a Canadian who does not make it, and if 4d. is not enough, will 6d. do, and if we double it and make it Is., will you love us twice as much, and if we make it£l will you love us through this world and the world to come? I am a very strong Imperialist, and that is why I regret this degradation of listening to such a conception of Empire, which, if it be true, and if it is to be the sort of Empire that the Chancellor of the Exchequer is going to build up and make still more firm, will be as rotten as the Roman Empire and as rotten and as menacing as the German Empire, and will call upon itself inevitably sufficient of the forces of civilisation to secure its destruction.

The right hon. Gentleman said the Colonies have asked again and again that we would give them a preference when we had settled our own tariff. He may say to me, "This is a fine Coalition speech you are making." I say to the Chancellor of the Exchequer, "That is a fine argument to advance to one who gave the pledge in the terms which he read out." "We have not settled our tariff, but the Preference is already produced. We know we know nothing about the tariff. The President of the Board of Trade knows all about it. It is the one he told us about in the box, typewritten, and he has the key. We are not going to know anything about the tariff policy, but we have to
1896
accept the Preference now, because the Chancellor of the Exchequer says, after the blood that has been shed, we must conceive of the British Empire as one people. We do conceive a sense in which the British Empire is one people, we who oppose this proposal, but we conceive a sense in which more than the people of the British Empire are one people. To say we must conceive the British Empire as one people is in itself, as a sentence in English, the merest rhetoric, but, translated into terms of the Chancellor of the Exchequer, it means that unless we are a people who confine our trade among ourselves we are a people who cannot remain united. Then he says the different Dominions ask us, "Is this going to be an equal distribution of your favours all round to various parts of the Empire?" The different Dominions are not going to look into the matter too nicely. It is all very well for the Chancellor of the Exchequer to use such phrases, but I address any business man in the House. Fancy people doing a business deal of such importance as is proposed when they are not going to look at it too nicely. Is this business or is it sentiment? If it is both, one will cancel the other. My opinion is that it is very bad business and very false but translated into terms of the Chancellor of the Exchequer, it means that unless we are a people who confine our sentiment.

The Chancellor of the Exchequer was good enough to say there is a great deal to be said for Free Trade for the whole world. Of course there is, but I am satisfied that Free Trade for the whole of the world would be a very bad thing for Great Britain. If America became Free Trade it would be a very serious thing for this country indeed, though not so serious, for nothing could be so serious, as that the restrictions put upon industries for a special purpose should be maintained in order that the right hon. Gentleman should carry through a proposal such as we are now considering. This is the worst-conceived business proposal that has ever been addressed to the British House of Commons. It began with a net loss; it is supported by rhetoric. It violates the sanctity of those who fought and died on the battlefield by suggesting that they want a cash payment now for their loyalty, and it opens up a world prospect which is appalling. If one thing more than another would have justified my opposition to this, it is the speeches of those
1897
who have supported the right hon. Gentleman. We had an hon. Member last night trying to support him with reference to the retention of these restrictions. He said he was not in favour of free Trade or of Protection. My experience shows me that any man who is not in favour of Free Trade or Protection can always be relied on to vote for Protection. It is like a man who tells you he has no party. He is neither a Liberal nor a Conservative; but when he gets to the polling booth he finds that the Conservative candidate is a personal friend of his own. He said he had no particular preference on these things, but he wanted to say a word on the subject of motors. "I cannot embrace the whole world in my views," he said in effect, "but do look after motors." But why look after motors? What is the matter with the musical boxes and the mouth organs'! Are not they to be looked after? What is the matter with those magnificent jewellery manufactures in Canada which do not exist? Are not they to be given a chance? Are you not going to summon from the wildest parts of the Colonies a highly-organised industry? If you look after motor cars, why not look after all these other things?

The hon. Member (Mr. Bigland) in supporting these proposals the other night said he knew of a gentleman who was willing to put up £100,000 to start a new business if he only got a little encouragement from the right quarter. And a very wise man, too. But I do not see why the hon. Member's friend is so modest. Bankers are very generous in these days. We shall always remember with gratitude the definition of a key industry as any industry that needs protection. If only I could get into the light quarter and come to a proper understanding with the President of the Board of Trade, it is not £100,000 or £1,000,000 or £5,000,000 that I could find by noon to-morrow to establish any industry which the Government will tell me is a key industry in the sense that it needs protection from everyone else. We should make from 100 per cent. up to 300 per cent. per annum, as manufacturers are doing now, to the peril of our whole financial structure and our economic life, and they are doing it under the protection of the President of the Board of Trade. All this talk about our industries as little puking babies that need the succour of the Treasury Bench to keep alive is the old stuff that we have heard since 1903, but it
1898
has never been presented with such a favourable Parliamentary opportunity. The hon. Member (Mr. G. Murray) said the War came despite Free Trade. I agree that it did, but we should not have succeeded in carrying it on if it had not been that we were a Free Trade country when it broke out, and, so far as possible, remained one during the War. That is disputed. Should we have had our great credits at our disposal in America if it had not been for our Free Trade policy? How could we have financed our American purchases? Is it conceivable that we could have financed our American purchases but for the fact that we were trading under Free Trade? Then the hon. Member (Mr. Wilson-Fox) gave another illustration which was very interesting. He said he had often told this story. I quite believe him. But I do not think he has told it in the House before. I should think he has told it at rural meetings, to the astonishment of the natives, where there is no reporter and no one can chuckle as we all chuckled when we heard it.

The hon. Member said he had told it before. I think it would be more acceptable in the country than it is in this House. The story is that there was an order obtainable for £60,000 worth of machinery. A British firm and an American firm tendered. The British firm tendered £300 below the American, "and so," he says, "that shows you what a very small margin will often secure contracts." But why run the thing so fine? Why take a risk on such a small margin? Why give this pitiful little preference? Why not secure the British manufacture? Fancy leaving as narrow a margin as £300 on a £60,000 contract! It is less than a half per cent. To think that an order for £60,000 turned on that! It is a story that the hon. Member may tell for his own pleasure, but not to the profit of anyone who knows on what profit contracts of that sort turn. I cannot see, if these arguments are to be advanced, why they are advanced in this House in support of the Chancellor of the Exchequer's proposal, and why he does not repudiate them. If these full-blooded protectionist speeches, advancing arguments which every protectionist has advanced year after year, are made, why does not the right hon. Gentleman say, "I am obliged to these hon. Members for their promises, in advance, of support, but they
1899
do not express my views. They go far beyond my intention. I am as innocent of such purposes as are in their minds as it is possible to be." If he would repudiate their arguments, we should feel some sense of security. But he does not, and we are entitled to presume that his supporters fully represent his own mind in the matter. The hon. Member (Mr. Wilson-Fox) said this question was our own domestic concern. Of course, there is a sense in which it is our own domestic concern; but we have all got to live together in this world. Every country has to trade with every country. It is an absurd proposal that we are going to live in independence of the commercial policy of other countries. Of course, we are not; and to say that we are going to make this purely a personal concern is to put before this country an ideal which we have fought in this War to destroy.

If the Chancellor of the Exchequer and his Friends have their way, we are going to establish an Empire the like of which the world has never seen, resolutely separated from the rest of the world, with great armaments commonly divided, with Protection established in every part, and we shall set up a new kind of alliance which will inevitably lead to the conditions of 4th August, 1914. I oppose these proposals because—I do not know what other hon. Members feel—I view with very grave alarm the present condition of things. If our ports are not freely opened, and opened very soon, the social condition of this country will be awful. We are confronted by the most serious conditions that any one of us has ever lived to see. There is not an article of common necessity for the masses of the people which can be produced at a price which is not abominably high. Fraud is being perpetrated from every quarter by the commercial classes. [HON. MEMBERS: "NO!"] I use the word "fraud" not in the penal sense as relating to an individual, but I use it in the sense that the person who pays the price is being defrauded because he does not get value for the money he pays, and he is defrauded because the person who sells is not giving value for the money he receives. This is not the time for proposals which mean limiting the imports into this country in order to give this trivial, ridiculous, and uneconomic Preference. We have no right to do this. We ought to concentrate our thoughts upon united progress and human
1900
effort. That will never come to this stricken world until we cease thinking in terms of tariff and terms of cash, and until we think in terms of human necessity and play our part in carrying out the programme that we were returned to this House to carry out, and that was to make this world a fit place to live in.

The speech to which we have just listened must, I think, have filled hon. Members with amazement. The concluding remarks of the hon. Member were of such a character that I think they clearly showed that he is in no way interested in commerce in this country, and has nothing to do with commercial concerns. That is important because it shows that he is completely divorced from any question of national industry, that he is not a producer and does not mind much about any such details. I will ask the hon. Member one question. Does he deny that the Prime Minister gave a definite pledge at the time of the election that we would give a Preference to the Dominions, Colonies, and Protectorates? I understand from what he said that he is a Coalition Liberal. I do not know whether he immediately made it clear on the pronouncement of the Coalition leaders that he would not have any truck with their policy. The facts stand for all the world to know that the Coalition adopted that policy and adopted it in spite of the fact—

I was opposed in my election by a Conservative protectionist. I was asked if I was a free trader and I said, "Yes." As a matter of fact, the subject was very little considered. We had more serious things in our minds than such a scheme as this, as I am sure the hon. and gallant Member had.

I desire to apologise to the hon. Gentleman, because I was under the impression from all I have heard that he climbed into Parliament on the back of the Prime Minister. He was almost fulsome in his adulation of the Prime Minister, and in his declaration of how heartily he followed his great leader. He mentioned in his speech that Liberals were returned because they were pledged to carry out the Prime Minister's programme.

To support the Prime Minister's programme. I do not
1901
think there is a great deal of difference. The Liberals were returned, himself included, because they were pledged to carry oat or support the Prime Minister's programme. I think we can leave the matter there, and leave the hon. Member to settle with his own conscience as to whether he is doing that at the present time. I do not want to follow the hon. Gentleman into the argument he has used with respect to Preference, but I would like to deal for a moment with the matter in which he endeavoured to find fault with the argument of the hon. Member for Tamworth (Mr. Wilson-Fox). To the hon. Gentleman's mind it was a very small matter if a contract in this country was lost owing to a difference of some few hundred pounds. I should like to give him an instance. I do not know whether the contract has been actually carried out, but a week ago the Tramway Committee of the Glasgow Corporation recommended the corporation to purchase 5,000 tons of steel rails. I have not the figures by me as I did not know the matter would be raised in Debate, but so far as my memory serves me the Glasgow figures were £19 5s. per ton, and the figures from the United States of America were £17 10s. per ton. I worked the figures out at the time, and I found that if the suggestion of the Tramways Committee was accepted, the ratepayers of Glasgow would save £5,500, but the loss to British industry would be £65,000. When we are paying unemployment doles in Glasgow far more than £5,000, are we wise, for any international idea which the hon. Member suggests, to say that we must give this great contract to the U.S.A.

May I add this for the hon. Gentleman's information, because the trouble is that some hon. Gentlemen have not been studying this question recently, that there never has been a day when there has been so little actual unemployment in this country as at the present moment. I think if that is worked out it will be found that that is the case. There is less actual distress in this country at the present moment than there has ever been, and if only we can start production in this country and not allow uncertainty to continue, you will see
1902
a great boom in your productive industries. I take very great exception to what the hon. Member said in regard to our Preference to the Dominions. He said we were giving something to the Dominions and Colonies for nothing. I think that at the end of this War no one in this House ought to be guilty of such a statement as that. Has he not followed the history of the Dominion Preference which has been given to this country for all these years? When he says that we are giving something for nothing, may I remind him that when the Preference was first established in Canada by that great Liberal statesman, the late Sir Wilfred Laurier, and accepted by every Parliament in the Dominion ever since, the whole of our exports to the Dominions were on the decline, but from that moment, and when a similar system was adopted by the other Dominions, our trade with the Dominions went up, as even the hon. Gentleman must know, hand over fist. With what result? Two years before the War Australia, with 6,000,000 people, was buying more goods from this country than the 68,000,000 or 70,000,000 people in the German Empire, while New Zealand, with just under 1,000,000, people were buying more from this country than Belgium with 7,000,000 people.

The hon. Member may try to wriggle out of the facts, but facts they are and facts they will remain. If that policy was good for the Dominions, and if they wore right in making sacrifices, it must be good for this country to adopt a similar policy, although I must confess that I cannot share the Chancellor of Exchequer's enthusiasm for the present measure before the House, because it is indeed a little measure. I would like to refer to what the Leader of the official Liberal party (Sir D. Maclean) said this afternoon. He said that we were moving to a fresh range of ideas. He does not seem to have moved very far. It is an extraordinary thing that he should refuse to us permission to consider the alteration of our fiscal system when he is telling us that we are all moving towards this fresh range of ideas. He suggested that any additional cost in this country must be serious. I presume he is referring to the duties and the loss of revenue. On the other hand, we have the hon. Mem-
1903
ber (Mr. Lyle-Samuel) taking an exactly opposite view and saying that we really should not consider the question of the advantage to the taxpayer or to traders or anything of that kind in his idealistic world. It is the reduction of duties which affects us in voting upon this question today, and I was under the impression that free traders desire to reduce the very duties upon which the principal point of Preference turns. They have always told us that duties must be reduced, that you must have a free breakfast table, but it appears that they must not be reduced on any account if the reduction is in favour of the people of the British Empire. The right hon. Gentleman told us that the way to get Free Trade throughout the world, presumably under the new League of Nations, is to hold to our present policy of Free Trade. We have held to it for sixty or seventy years, and can anyone say there has been the slightest inclination on the part of any other country in the world to follow our example? Can anyone deny that far from that being the case they have taken every advantage of our policy to exploit our people and to exploit our labour market. When this argument has been used, as it has been used this afternoon, that for the sake of the League of Nations we must not do anything to trade with our own people, I would ask the right hon. Gentleman and his colleagues whether there has been one jot or tittle of evidence that President Wilson, whom they are so ready to quote, has shown any willingness whatever to abandon the fiscal system of the United States of America, or the preferential tariffs they have with their Colonies. Let us try to keep to facts.

We have been dreaming on this question for so long. We have always been scanning the horizon for the other countries that were going to follow our example, but no evidence has been forthcoming that any countries are prepared to do that. Whether this question of Preference is to be a big thing or a small thing, I ask my hon. Friend (Mr. Lyle-Samuel), who declared himself an Imperialist, whether he can face the citizens of our Dominions oversea after they have made all these great sacrifices for years, to the enormous advantage of this country, and whether he can still look them in the face after what they have done for us in this War, if we are still going to refuse to reciprocate the great advantage which they have
1904
given us. I do not know whether my hon. Friend has had the privilege, as some of us have had, of seeing men from Canada and Australia die like flies in the great battles of the War, showing the tremendous sacrifices that these people have made in coming 12,000 or 13,000 miles to enter into a quarrel in the Old World to which they are so much attached. We have had the unanimous action of the Dominions, expressed by all the Imperial conferences, asking that there might be an inter-Imperial arrangement of a similar character. Is the hon. Member now, at the end of this War, after all that has been given to the Mother Country by the Dominions, going to say, "No, we will not tolerate such a thing, because it may mean a little more cost to this, that, or the other?" or is he going to follow the example of the Chancellor of the Exchequer, who has made a great appeal this evening, and to realise that the only standard on which we ought to consider this question is a high spiritual standard, that we are going to stand by our friends in the British Empire, and to show, after the Empire has stood this great test, that we are indeed of one family, and we are not going to continue the policy of divorcement which has been adopted in the past

I cannot help thinking, after having listened carefully to this Debate, that there has been a great deal of exaggeration on both sides of the question. I happen to be a Coalition Liberal, and naturally have to ask myself on which side I am going to vote. We have been told from the benches opposite that those of us who vote for the Government are breaking our pledges, while on the other side we are told that if we do not do that we shall stultify ourselves. An hon. Member below the gangway says he feels that he has been sold. I cannot credit that. I do not think that he has quite grasped what is the object of hon. Members opposite, because what the Leader of the Opposition, the modern Cassandra, if I may be permitted to say so without any impoliteness, is out for is to get Coalition Liberals to throw in their lot against the Government. As to the position of the Chancellor of the Exchequer, may I refer to what was the joint programme put before the country at the time of the election—a programme to which we Coalition Liberals adhered— as a programme that was necessary in order that the two wings of the party
1905
should know exactly where they were. We all know that before the War the bulk of our Unionists friends were pledged to a policy of Protection and Preference. We on our side were free traders and are free traders to-day. We therefore wanted to know whether anything had taken place since the Armistice was signed which would leave us on unsafe ground. The statement of the Prime Minister at the General Election was absolutely known to the country, and satisfied us and satisfied our constituents who returned us to Parliament. So it is not right to say that the question was not raised. We were asked about it, and defined our position. The Prime Minister in his manifesto said:
Until the country has returned to normal industrial conditions it would be premature to prescribe a fiscal policy intended for permanence.
On this part of the programme we are still in that position now. I shall have a word to say as to what the other side said about committing themselves to the present policy, seeing that hon. Members opposite committed themselves to supporting Mr. McKenna in 1915.

The manifesto continued:
The country will need all the food, all the raw materials and all the credit which it can obtain and fresh taxes ought not to be imposed on food or on the raw materials of our industry.
From my point of view as a free trader that is a very substantial step in advance for men like the Chancellor of the Exchequer and others who were committed in the past to taxes upon food. Here is a clear declaration that at least in the interim period that shall not be attempted:
At the same time a preference will be given to our Colonies upon existing duties and upon any duties which for our own purposes may be subsequently imposed.
If any more comment be needed upon this, it may be found in the letter to the Leader of the House from the Prime Minister, dated 2nd November. There the statement is made which carries out a little more fully the pledge which was in that manifesto which I think was published shortly afterwards:
In the first place in regard to economic policy. I have already accepted the policy of Imperial Preference—
That is the Prime Minister's statement on 2nd November, so that the hon. Member below the gangway who says that he was sold could not have read that, and he must have been utterly ignorant of the programme of the Prime Minister on which he himself got into Parliament—
1906
The Prime Minister proceeds:
as defined in the resolutions of the Imperial Conference to the effect that a preference will be given on existing duties and on any duties which may subsequently be imposed. On this subject I think there is no difference of opinion between us. I have at the same time stated that our policy does not include a tax on food, but that does not of course interfere with the granting of a preference on any article as, for example, tea or coffee, on which for our own purposes we have imposed a duty.
When I come to look at what the duties are, there is not one of them which can be called a protective duty. [Laughter.] Hon. Members may smile. They are on much safer ground in asking us to vote against Motor Taxes, but the ones I refer to are not protective.

They are all in the Clause, quite true. But there is a considerable difference to my mind. These are duties which we have imposed as indirect taxation. The position of an ordinary free trader is that he is not opposed to indirect taxation as being in itself an interference with Free Trade, and the imposition of a duty on an article coming from abroad is not Protection. What we object to is the imposition of a duty as a means whereby the producer in a country which is protected can put up the price and collar the extra amount for himself. Most of these taxes are on things which cannot be produced in this country. They are taxes which have been sot up in Free Trade times by Free Trade Ministers, and have been continued until the present time—on tea, coffee, chicory, sugar, glucose, and all the rest of it. They were all in existence in every Free Trade Budget which we have had, and it is ridiculous to say that this is a new departure that is going to launch us upon a landslide of Protection. All it does is to give a slight Preference on existing duties. There are two advantages. Firstly, they are given on products which we consume here, and are largely in one sense food, and will reduce the cost by some £3,000,000; and secondly, because they do have the other effect of giving our Colonies a preference. Now, I commit myself to that wholeheartedly. It came originally from the Imperial Conference, but it has been supported in a document which I hold in my hand which is signed by such free traders as Lord Balfour of Burleigh and many
1907
others on the Committee of Commercial and Industrial Policy after the War, in which they say, as regards the imposition of duties on food:
There are at present such duties levied in the United Kingdom for Revenue purposes—on tea, coffee, cocoa, sugar, tobacco, wines and spirits, and we have already recommended in our resolution addressed to the Prime Minister on the 2nd February, 1917, that these should be utilised for the purpose of giving a first measure of Colonial Preference. We have recommended that preferential treatment should be accorded to the British Overseas Dominions in respect of any other Customs Duties which may hereafter be imposed in the United Kingdom. We desire to direct attention in this place to the expediency of considering measures of Imperial Preference other than the imposition of differential Customs Duties, as for example, Government contracts to purchase for a term of years at guaranteed minimum prices the whole or part of the output of material in the Dominions required by the Home Government or financial assistance for the development of Imperial resources.
When we are told that because we do that we are committing ourselves to the landslide of Protection, I frankly say that it is downright nonsense. So far as I am concerned I have stated these opinions in my Constituency, and I am on perfectly safe ground. When we are told that the Chancellor of the Exchequer is bound to go on to a system of taxation on food, may I point out that he himself denied that. When this point was raised originally on the 1st of May, the Chancellor of the Exchequer, interrupting the Leader of the Opposition, said:
I am loth to interrupt my right hon. Friend. Personally, I have never repented of my support of a tax on food in pre-War times, and have never given anybody any reason to be doubtful of my opinion upon the subject; but it is no proposal of His present Majesty's Government to place new duties upon food, and what I had in mind when I used the words my right hon. Friend has quoted was that Imperial trade now actually done in the articles made the subject of preference will, I believe, under that preference, enormously extend within the lifetime of many Members. If it goes further still, I am glad, but all I had in my mind in that statement was the effect of the actual preference proposed in the present Budget. "—[OFFICIAL REPORT, 1st May, 1919, col. 396, Vol. 115.]
I am perfectly satisfied with that. I am as convinced a free trader as ever, and am opposed to a protective tariff, but I find nothing whatever in the existing duties which may be called protectionist except in the case of motor cars and a few other things and Motor Duties are a very good tax at the present time, because they are keeping out objects of luxury, and if
1908
people want those expensive articles from abroad it is just as well they should pay this tax.

Yes, and in this case the people who can afford to buy motor cars are just the people whom I should like to make pay the tax. As a free trader, my withers are entirely un-wrung. I am not at all attracted by the wooing of the right hon. Gentleman opposite. I do not feel that I have been sold. I support whole - heartedly this programme, because I believe that it is a wise and expedient programme for the transitory period in which we still find ourselves.

Those with whom I happen to be associated do not pin our faith either to Free Trade or to Tariff Reform as presenting a final solution of the many difficulties with which we are faced. But of the two systems, we think that that of Free Trade is better than that of Tariff Reform; though not exactly the Free Trade policy of the Liberal party, the party that is moving this Amendment. I think that party still believes in imposing Customs Duties upon articles for purposes of raising revenue, and last night many of the hon. Members who are associated with the Mover of this Amendment refused to support an Amendment which had for its object the entire removal of this tax. Therefore I, for one, and the party with which I am associated, do not entirely follow the Mover of the Amendment and those who have supported him in the House to-night. We shall, however, support the Amendment, because, as I have already stated, of the two systems we think Free Trade is the better for the workers of this country. I want to approach the question, first, from a revenue point of view because this Clause proposes to give between £2,000,000 and £3,000,000 to the cultivation of tea alone. I think it will have to be admitted that that amount will have to be paid by the consumers of this country, and that it is largely going to Be extracted out of the pockets of the poor. The amount of revenue which is going to be relieved is £2,000,000; therefore, that sum has to be derived from somewhere else. Who is going to pay the extra twopence?

Well, you will be able to follow me. It is the twopence that is taken off which he will have to pay, because those who send tea to this country, the cultivators, will charge the same for the tea as though it were actually on, and will pocket the twopence. The object of the preference, as the Chancellor of the Exchequer has told us, is to enrich the Colonies and the Dominions. Who is it to enrich? The cultivators of tea. My point is that that £2,000,000 have got to be found. I want to draw the Chancellor of the Exchequer's attention to a document issued by his Department dealing with taxes and super-taxes. The first item deals with incomes not exceeding £160 per annum, and it shows that the taxes derived from that source of income give the right hon. Gentleman about £1,600,000. I believe a deputation has met him to ask for the removal of the point of abatement from about £130 to a higher figure But the right hon. Gentleman finds he cannot do that. He can give £2,000,000 to tea growers in the Dominions, although he cannot give even £1,600,000 to the people of this country, many of whom have been struggling along in this War and have come back again to find that the cost of living has gone up so much that their standard of livelihood is not so high as it was when they went away.

There were two points in the speech of the Mover of the Amendment which, I think, were entirely justified by the speeches which have been delivered. The first point was the uncertainty of the proposals of the Chancellor of the Exchequer. The Mover of the Amendment pointed out that this was only the beginning, and that no man could see to-day the ultimate stages of the progress of this form of Protection. Also, that it was ultimately going to lead to other articles being taxed for the purpose of protecting, not only the Colonies, but our own industries. I think the speeches which have been de-
1910
livered by those supporting the Government, and by the Chancellor himself, all point in that particular direction, because, in dealing with that matter, he said that the future of a policy of that character absolutely depended upon Parliament and not upon him. The present composition of Parliament leads one to believe that if a good many hon. Members who have spoken this afternoon have their way, and can influence the Chancellor of the Exchequer, the policy which he has inaugurated in this Budget will be carried still further in a progressive, rising degree, until we have absolute Protection in this country. Another point which was dealt with, and with which the right hon. Gentleman has attempted to deal, in a very unfortunate manner, I think, was that of the incidence of Preference being unequal. Trying to answer that, the Chancellor of the Exchequer said that, so far as the Dominions were concerned, they had never made such a short sighted commercial demand for a preference, and he thought there would be no demand made. Well, the right hon. Gentleman has a far-wider experience and knowledge in politics and in commerce than I have, but, from my limited experience in this House, I am led to believe that once he starts any form of Protection he does not know where he is going to end. He may open the sluice-valves of Protection, but he himself and his Government may probably find some day that they themselves, if they desire to do so, are unable to shut them again. I have listened in this House to the farming interest, which is represented on the opposite benches, rising more than once to press the Government to declare their policy on agriculture. What policy? The policy of giving a form of protection to the farmer which he has obtained during the War. During the War you have guaranteed certain prices to the agricultural interest. As soon as ever the time approached when those promises were nearing their completion you got a united organisation in this House crying for the continuity of the policy of protecting the farmer. Therefore, the only evidence I have got, so far as this House is concerned, goes to show that, instead of the people of the Dominions being satisfied and having no enmity and jealousy one against another in relation to the incidence of this preference, the very opposite will be the case. Once you start this, and give a certain preference to any form, either of industry or agriculture, behind it will grow
1911
up an interest which is dependent upon it. Once any attempt is made to break it down again that interest will organise itself and bring its influence to bear on this House, not only for its continuity, but for its advancement.

It has also been stated during the Debates that, in view of the League of Nations, we ought to be very guarded and careful before we take any step whatever which might culminate in another disastrous war such as that through which we have been passing. I am not an historian, and I cannot claim to be one, but I remember listening at an election to one of the greatest historians in this country, who said that the wars of England and the great movements of Europe and this country had an economic basis, except two. You cannot foresee the future and the very beginnings in this House to-day, small though they may seem, these little streamlets of Protection that we are, so to speak, letting loose may begin to run and gather in their flow and extend until they become a mighty stream, which will culminate again in a conflagration such as that through which Europe has been passing. What has been the central note during that conflict? The economic domination of Germany. And, as has already been pointed out this afternoon by one speaker, if we attempt to do anything such as we are trying to at the present moment, we, who entered this War for no territorial or economic aggrandisement, would be the first to resort, not to the policy which we were pursuing before the War began, but to anew policy, diametrically opposite to that which we had before the War. We should be setting a bad example which can and may be followed, and which, in my opinion, if it is followed, will only assist in the generation of those human passions which went along way to make this. War what it actually was. One of the first causes of war is the creation of mutual suspicion among the nations, and if this Clause is carried to-day it will be the beginning of that suspicion among the nations, from an economic point of view. It can be of no use or advantage to the working classes of the country, whom I support and whose side of the case I am here to advance as far as I can. It does not depend on tariff or non-tariff, but upon the right of men, without let or hindrance, to apply their skill, ability, energy, and industry, and so to create a commonwealth of happiness
1912
and prosperity which does not and cannot depend upon any tariff wall.

May I make an appeal to the Committee? I do not underrate the importance of the issue that we are deciding, but we have discussed it for some time, and we have still to deal with some other detail aspects of the matter. I trust, therefore, that the Committee will be content now to take a decision upon this matter.

I rose only because I noticed that some of those who are opposed to the Government refused to answer the appeal of the Chancellor of the Exchequer, and I did not feel that it was fair to our side of the House that the Debate should be conducted from one side only without the other side having an opportunity of replying. The hon. Member who spoke from the Back Benches on the other side (Mr. Spencer) tells us that this is going to be the beginning of suspicion among nations. Really, before anybody gets up on the Labour Benches to address the House of Commons I think he might acquaint himself with the facts. Practically every great nation at the present time has tariffs. I should have thought, before speaking from the Labour Benches, that he would have ascertained that this was the settled policy of the Labour party in Australia. The Labour party in Australia fought the last General Election on what they claimed to be a policy of tariff ramparts. If every other country in the world continues to have tariffs, we in this country have every right not necessarily to adopt Protection, but to consult with our Colonies as to what measures we shall take as one Empire to meet the difficulties of the future. That is all that it amounts to. This does not commit the country to a general policy of Protection or tariffs. Personally, I should not be sorry if it did, but I am not going to claim, as a tariff reformer, that we have won a victory. I do not think that we have. All that it decides is that we and the Dominions are going forward together to face the very difficult future.

We have been told that we have a new world. I hope that we have, but it is one in which a good many things, including coal, are getting very dear. If it is a new world, then we can go forward in a new spirit. If every other country is going to throw down tariffs, then I for one would not put them up. But if we are to have our trade coerced, controlled,
1913
changed, and diverted by the action of every other country except our own, then it is time that as a nation and an empire we resumed control and tried to free our trade from foreign domination and diversion.

I very much regret that the hon. and gallant Gentleman who spoke first (Captain W. Benn) is not here, because I wanted to ask what has become of his Chinamen. In the earlier Debate he told us that we must not do this because the Chinese Empire would object. What has happened? Has he failed to rouse" the Chinese Empire and to get the Chinese to join his small party on the opposite benches? We were told that we were not to be allowed to do what we liked because the Chinese people would object. That is a new form of authority to which we have to defer in our Imperial affairs. What has happened? The hon. and gallant Gentleman has withdrawn his Chinaman, and apparently that argument has collapsed. We are now setting to work on the basis of the Empire and not on the basis of these islands. We can move forward towards more Free Trade within the Empire perfectly well if the Dominions wish it, and I protest against any suggestion that any nation or any League of Nations has any right to dictate what we shall do within our own Empire. An hon. Member sitting below the Gangway took the coupon, but apparently did not act up to it. I think he would have behaved more fairly to the electors if he had either refused the coupon, or, having taken it, had stuck to the bargain on which we all came here and had supported the Government. He told us that Mr. Joseph Chamberlain many years ago, in that great speech which I well remember, warned the country of the danger that we were in, and likened this country to the Campanile of St. Mark's, Venice. I look upon that as an absurd suggestion.

Has the hon. Member forgotten what has happened since then? Does anybody doubt that Mr. Chamberlain was right, and that we were in great danger, in danger of relying too much on foreign sources of supply, on food from overseas, and on absolute dependence upon Germany for certain essential products which Germany did not produce because she was a better place in which to produce them, but because she had artificially created a position whereby she controlled certain key industries or certain things
1914
which were essential for our maintenance in peace and in war? Mr. Chamberlain was absolutely right when he warned us of the danger. What did his opponents say? They said: "We are all right in this country. There is no danger. Peace is assured. We have Free Trade." War has come upon us, and it is for us to remember that even now this is not a peaceful world. We cannot be certain that foreign nations may not copy the example of our own Labour party by cutting off: certain essential supplies, and for the sake of freeing ourselves from foreign control, and for the Bake of freedom of development as we wish, we must meet our Dominions and decide now and at once to go forward. The matter cannot be put oil We ought to settle it now, because almost all the nations within the next few months will be preparing their budgets and be making fresh trade arrangements, and it will make a great difference if, before the next Budget is brought in, the great Dominions know where we stand on this issue. If we decide to accept the advice of the Liberal party and refuse to work with our Dominions, it will leave them free to be courted by other countries. I do not think that we can afford to run any undue risks. We ought to build up our prosperity and our whole scheme of development not on the basis of these islands, but on the wide basis of the British Empire.

I am extremely sorry not to answer the appeal of the right hon. Gentleman opposite, but I really think it was a little unreasonable at this hour to make that appeal. After all, this is a matter of the profoundest importance to hon. Members on this side of the House, and it is a little unreasonable to make a vital and fundamental alteration in the whole of our fiscal policy after a three hours' Debate. There was a speech made by an hon. and gallant Member opposite which interested me very much, because it followed the well-known, the beaten, and well-defined track of the speeches of Coalition Liberals. First of all, he suggested that these preferences are so small or diminutive as to be quite unimportant and innocuous, and, in the second place, that as no additional taxes are imposed, but merely a Preference given on existing taxes, the issue of Free Trade or Protection is not raised at all. This question of Preference can only be of value to the Colonies to the extent that it affords protection to them, and to the extent that it affords protection to them the consumer
1915
undoubtedly will have to pay. Practically every Member who has spoken on the other side has used the argument that we should be quite willing to agree to these proposals because of the splendid way in which the Colonies stood by us during the War.

No argument has been submitted to show whether these proposals in themselves are good or bad. We must assume that they are good, that they are sacrosanct, and must not be criticised. They must not even be examined in detail. If we do so, we are at once told that we have forgotten nothing and have learnt nothing from the War. With engaging modesty, hon. Members opposite, because they stand exactly where they stood before the War, seem to think that they have nothing to learn. On the other hand, because we stand where we did, they say that the War has taught us nothing, and that we still have everything to learn. I wonder why hon. Members opposite can only conceive of Imperial unity and of a desire to assist the Colonies in terms of 2d. on sugar and 33 1–3 per cent on musical instruments. I challenge that position altogether. I deny that I have no appreciation at all of what the Colonies have done. We object to these proposals because we believe that they are the first step towards a complete scheme of Protection and Preference, which we believe will be disastrous for this country, and, being disastrous for this country, will finally be disastrous for the Colonies and the Empire itself. The right hon. Gentleman opposite referred to the history of this question. It commenced with the famous letter of 2nd Novmber, 1918, from the Prime Minister to the Leader of the House. It is very important that this history should be referred to in order that the merits of these proposals may be properly understood. In the letter it states that:
If an election on these lines is to take place, I recognise that there must be a statement of policy of such a nature as will retain to the greatest extent possible the support of your followers and of mine.
And so the bargain was made. That bargain was so skilfully devised as to make free traders believe they had nothing to fear and tariff reformers believe they had everything to hope for. It is really very difficult indeed to believe that the Prime Minister's supporters who had hitherto shown uncompromising hostility to these proposals, suddenly become converted in heart and mind on the 2nd November,
1916
1918. I am not referring to these matters in order to charge Coalition Liberals with either inconsistency or anything else. If they think that the maintenance of the Coalition is of more importance than the maintenance of Free Trade, that, of course, is their affair. But this bargain does throw considerable light upon the quality and the merits of these proposals. They are not proposals framed by men having common convictions, common purposes, and a common policy. They are not proposals decided upon the merits of the case. They are proposals decided, as the letter indicates. in order to secure to the greatest extent possible the support of the followers of the Leader of the House and the Prime Minister. Is it not obvious that proposals brought in on those lines, not in order to find the beet solution of this problem but to secure the greatest amount of electoral support—is it not very obvious that proposals brought in under those circumstances can never be very happy in their results? It has been stated again and again that these proposals have been demanded time and time again at the Imperial War Conference. In introducing his Budget resolutions the Chancellor of the Exchequer said that what he was doing was giving effect and assent to the declarations of the Imperial War Cabinet and the Imperial War Conference two years ago. I am very loth to contradict him. But I am really unable to ascertain whether that is an accurate statement of the position or not, because, as I read the Resolution which was passed at the Imperial War Conference on the occasion to which he refers, and which says:
The time has arrived when all possible encouragement should be given to the development of Imperial resources, and especially to making the Empire independent of other countries in respect of food supplies, raw materials, and essential industries. With these objects in view this Conference expresses itself in favour of: (1) The principle that each part of the Empire, having due regard to the interests of our Allies, shall give specially favourable treatment and facilities to the produce and manufactures of other parts of the Empire"—
That is not at all the proposal which is being made here. There is nothing either modest or innocuous or limited to existing duties about the Resolution passed at the Imperial War Conference. The Resolution, as the House will observe, goes the whole way. It covers food, raw materials, and manufactured articles, and of course nothing less than that will satisfy the Dominions. Why, indeed, should it?
1917
Anything less than that would be a merely truncated proposal, which, as has already been said, gives a preference to one part of the Empire and does not give a preference to another. It is quite clear that these proposals as they stand do not carry out the desire expressed at the Colonial Conference, and are not what the hon. and gallant Gentleman the Undersecretary for the Colonies called the coping-stone of the proposal. They are the foundation-stone, and upon that foundation-stone they desire later to build the whole edifice, and put on the real coping-stone. And it is because we "believe that that is what will be carried out that we oppose these proposals. There was a very curious coincidence in the Debate on the Budget Resolutions. Apart from the Under-Secretary, I think there was only one hon. Member of the House who devoted himself exclusively to these proposals in his speech on that occasion and, of course, like a good believer in Preference, he sounded the Preference note and principle at the beginning of his speech in the most approved style. But he had another claim to distinction. He happened to be the only Member who spoke in that Debate who had an expert and exact knowledge of any particular trade affected by these proposals. In his case it was the sugar industry. He believed in Preference in principle; but when it came to the one thing he did know Something about he was absolutely against it. And why was he opposed to it? Because, in his own words,
There is such a thing as fair play, even to a small British industry, and there can only be one result from this. If the West Indies do what they say they are prepared to do, and increase their output until they are able alone to supply the demand of the United Kingdom, then I say there is no British sugar refiner who can stand against that.
He says these proposals, if carried out, will destroy his industry. So far as I can ascertain, in spite of all that has been said all the expert opinion is against these proposals. The right hon. Gentleman the Chancellor of the Exchequer the other day swept aside trade opinion as being of little value; but, after all, trade opinion is expert opinion, and, as such, should, I think, have some attention paid to it. That is the policy which the House is asked to sanction, and, in order that hon. Members who are free traders may clearly understand what is really involved, I am going to take the liberty of reading two extracts from the Report of the Committee
1918
on Commercial and industrial Policy after the War. The first relates to the question of Imperial Preference.
It is obvious that any tariff which is to be used to any considerable extent as a means of reciprocating the preferential treatment accorded by the British self-governing Dominions to the Mother Country, and as the basis for a scheme of inter-Imperial Preference could not be limited to manufactured or semi-manufactured commodities, but would have to be extended to a wide range of foodstuffs, and possibly even raw materials.
Side by side with that let me read another extract from the same Report:
In the economic competition after the War, whilst organisation, the granting of credit, and efficient management will be important factors, the controlling factor of all in our opinion will be the ability of the exporting nation to manufacture and export its products cheaply. By this we mean that all elements of high-class production shall be available at bedrock prices without any avoidable addition of imposts, freights or interest charges.
Before these proposals can be commended to this country these two propositions, both from the same Report, have to be reconciled. For my part, I profoundly believe that they never can be reconciled, and that to the extent to which you give way on the position of Preference you are bound to undermine other positions, such as the position of obtaining all the necessities of production at bedrock prices; and it is only on the basis of that position that the prosperity of this country can be re-established.

We have listened to a great many speeches from the other side, but I am convinced that there are many points that have not yet been answered. An hon. Member opposite said that if a preference of twopence were given on Indian tea the consumer would have to pay. I fail to see what process of reasoning induced him to make a statement of that sort. There is one point, however, that I wish to bring out clearly, namely, the terms of the Amendment which has been proposed by hon. Members opposite. They propose to leave out certain words from Clause 7, and that means that they are not in favour of calling this a preference on Empire products. But I have not yet heard from any hon. Member opposite that they are prepared to re-impose the extra twopence on Indian tea. I do not know that any of them are desirous of going before a working-class constituency and advocating that another twopence should be placed on Indian tea

The Amendment before the House is to leave out certain words at the commencement of Clause 7, namely, the words "With a view to conferring a Preference in the case of Empire products." In other words, hon. Gentlemen opposite are prepared to leave the taxation as the Chancellor of the Exchequer has introduced it, provided it is not called Imperial Preference, and the whole position seems to turn upon the point that it must on no account be called Imperial Preference. It has been said that it is of no advantage whatever to India. In fact, the Mover of the Amendment applied to it, I believe, the terms "fantastic" and "fallacious," and various other epithets, and he said that it would be of no advantage whatever to our Indian Empire. The Mover and the Seconder reminded me of two gentlemen trying to play the part of the title of one of Shakespeare's plays, "Much Ado about Nothing." They endeavoured to show that the proposal of the Chancellor of the Exchequer would in no wise benefit our Colonies and yet they forgot that our Colonies from time to time have asked this country to give them a Preference. All our Dominions and Colonies have asked us in the past to give this preference. I am sure that those people who call themselves

§
free traders in no wise are true to their opinions, because we cannot have Free Trade in future if there is to be any industry that needs protection, and if we are prepared to concede that there is a single-industry that needs protection, it is against Free Trade, and as such they cease to be free traders. They are so fond of these old shibboleths of the past they cannot get away from them. It was a pitiable spectacle to see an hon. Member coming down and telling us here that he fought as a Coalition candidate, and then that he-was going to oppose the first introduction of Imperial Preference. I consider that anyone who contested a seat at the last Election as a Coalition candidate, and' then opposes the first step in the way of Imperial Preference, is committing a fraud on the electorate, and has no right to continue with ideas of that sort. The sooner anyone on this side of the House who holds ideas of that kind passes over and joins the Opposition, the better for the Coalition. With those few words I support the original Clause.

§
I ought to say a word or two in moving this Amendment. An Amendment appears on the Paper in the name of some hon. Gentlemen opposite, and it is immediately succeeding the Amendment I am now moving. The object of my Amendment is to make it possible to extend the Preference to territory which is mandated to us, if that be found desirable. Such a territory hon. Members opposite appear to think would be a territory under His Majesty's protection. Technically I think that is not so. It would be under the protection of the League of Nations, but mandated to this country, and in order to make the position clear and to enable us to extend the Preference to these mandated territories, I propose the addition of these words. Something, in fact everything, must depend upon the character of the mandate, and in respect of different territories the mandate may not be the same mandate. I think it certainly will not be the same in respect of every territory that is so mandated, whether to this country or to another Power. The terms of these mandates, however, have yet to be exactly decided by the Allied Powers, but certain mandated territories will naturally fall under the administration of the countries to which they are entrusted by the mandate. I take as an example German South-West Africa, which would go to the Union of South Africa and must be worked as an integral part of the system of the Union of South Africa. It would be quite clear that in such a case as that we must not be prevented from extending the Preference to South Africa proper, because the late German South-West Africa is incorporated within the Union and forms part of the Customs and administrative Union of South Africa. I anticipate that there is no reason why we should not extend the Preference to the products of any mandated country. It would not be a Preference, of course, to our citizens in that country and to them only; it would be a Preference, the results of which would inure to the advantage of the inhabitants of the country whoever they were. It may be that the terms of a particular mandate may make it impossible that in such a case there should be a reciprocal Preference to our products entering the mandated territories, but I see no reason to suppose that there will be anything which will prevent our
1924
extending the Preference to any territories that were mandated to ourselves or to any portions of the British Empire.

I have that entirely in my mind. What we do in respect of a mandated territory must be done by the terms on which we receive the mandate, clearly, but if the terms on which we receive the mandate are, as I have no doubt they will be, compatible with our granting this Preference, then we shall propose to extend the Preference to these mandated territories, and the object of my Amendment is to give us power to do so, but the Committee will of course observe not to take power to do so without the House of Commons having an opportunity to express an opinion upon the individual case if it wishes, because this would be done by Order in Council, which must be laid before each House of Parliament, with opportunity to present an Address to His Majesty by either House within twenty-one days, so that the House of Commons would have the opportunity of considering the inclusion of any of these territories on its merits, and, if they saw fit, of preventing that inclusion.

I fancy that my putting down an Amendment on this question has induced the Chancellor of the Exchequer to straighten out his own Bill, because apparently he is taking power to do the contrary of what we suggest in our Amendment next on the Paper, and I take it we may as well have a discussion on both Amendments at once. I do not agree with the suggestion of the Chancellor of the Exchequer. This power is largely governed by an Article of the League of Nations, which, dealing with mandatory powers, says:
The wishes of these communities must be a principal consideration in the selection of the Mandatory. Other peoples, especially those of Central Africa"—
and I take it that this Amendment is put down to cover South-West Africa and New Guinea—
are at such a stage that the Mandatory must be responsible for the administration of the territory under conditions which will guarantee freedom of conscience and religion, subject only to the maintenance of public order and morals, the prohibition of abuses, such as the slave trade, the arms traffic, and the liquor traffic, and the
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prevention of the establishment of fortifications or military and naval bases and of military training of the natives for other than police purposes and the defence of territory"—
and then come the significant words—
and will also secure equal opportunities for the trade and commerce of other members of the League.
I do not want to go back on the discussions we have had to-day. I am quite convinced in my own mind that, if you want to sow the seeds of dissension between the nations who are concerned in the conduct and pursuance of the ideal of the League of Nations, the very best method of doing it is to take to ourselves the power to impose upon what are called mandated territories Preference Duties, in which, according to this Covenant, other nations will not secure equal opportunities for their trade and commerce.

Is the hon. Member not labouring under a mistake? There is no proposal here to take power to impose any duty on any mandated territory. The proposal here is to take power to accord in our own market a preference to the products of a mandated territory, which is quite compatible with the Clause in the League of Nations which he has read.

What really happens is this. Supposing one of these territories is mandated to us by the League of Nations, we should then, for the purposes of those fiscal arrangements which the right hon. Gentleman is fathering here this afternoon, incorporate that territory as if it were a bit of the Empire entitled to those fiscal arrangements. Is that so or is it not?

I should certainly do that if it were compatible with the terms of the mandate, and it is in order that we may be able to do it, if it is compatible with the terms of the mandate, that I move this Amendment.

It is, at any rate, a declaration to the world—so far as the world can understand our fiscal policy—that, if we get these territories mandated to us, it is our intention to impose the same fiscal system upon them as we are proposing
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to set up now. Believing that fiscal system to be wrong, believing it to transgress every natural law that I know anything at all about— My right hon. Friend the Chancellor smiles, and I suppose that means that he does not quite know what I mean.

I should be sorry to deprive my right hon. Friend of that pleasure. But what I mean is simply this— and it is peculiarly valuable in view of the fact that this is going to embrace new territories—the operation of Free Trade throughout this world is as natural a law as the law of the seasons, the law of day and night, the law of the tides, and any artificial interference with that natural law will bring damage to the people who attempt to make that interference.

I do not know of any nonexistent natural law. I would remind the Committee that many of these new territories may be undeveloped, territories of enormous potentialities, and territories some of which are not occupied by people of the same blood as ourselves. The second point is this, that the operation of Free Trade is, in my view and in the view of many of us, the best moral guarantee for the preservation of the peace of the world, and my right hon. Friend, by seeking to impose on these mandated territories this trumpery, trivial Protection which he is responsible for in this Bill is sowing the seed of future dissension among the peoples of this world and is promoting war and not peace, and 1 object very strongly to the imposition of this on territories which are in the control not of us as a nation in particular, but of the League of Nations of which we form a part. I cannot conceive of any subject which is likely to prove more dividing among the peoples who form the League than just the bartering of territories which are going to be of commercial value to a particular country, because that is what it means. America, France, and ourselves will want the country that means most to the interests that can push them most in. this House. We have seen enough of profiteering in this House during the War, and I do not want to see the Lobbies of this House filled with deputations pushing us to use our influence to hand over the
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operation of this system to particular countries, and personally I shall oppose this even to the extent of again dividing in the Lobby. It may be that hon. Members think we are making a mountain out of a mole heap.

After all, we are a small party in this House, but we are fighting for a big principle, and the big principle we are fighting for is the extension of free Trade. We believe that Free Trade is the only valuable asset that nations have in which they can live at peace with each other. Here you are going to throw into the melting-pot of the world the trade of these new countries which may be mandated to us. You talk about trade following the flag, but there are a great many other things that follow the flag. If the right hon. Gentleman and those associated with him, taking advantage of an artificial political situation, care to place their political future and political reputation at stake in an experiment of this kind, they are welcome to it. It may take us a few weeks, or a few months or a few years, but as soon as we get a clear chance of putting the position before the people of this country, my right hon. Friend opposite and those associated with him will be relegated to the oblivion which they will have rightly deserved.

This Amendment, as my hon. Friend has pointed out, raises most important issues. I do submit that if Preference is to be given at all, the operation of a Preference ought to be confined solely to the territories which really form part of the British Empire. It ought not to be applied to lands which are included within the Empire under a mandate of the League of Nations. Take the Chancellor of the Exchequer's own formula. He has told us to-day that Preference is to be given as a spiritual recognition of a spiritual unity. I think I have got it right. It is a very remarkable phrase, considering that the spiritual recognition is to be purely on a cash basis. What spiritual unity, in the sense in which he used these words, have we got with these territories which may be given to us for a period of time under a mandate of the League of Nations?

How much have they done for this Empire? How much blood have they shed to bind this Empire together? Not a drop. How much treasure have they spent? Not
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a penny piece. How much have they put into the pool of spiritual unity? Nothing at all. Judged by the right hon. Gentleman's own test, it breaks down. But, looking at it on wider grounds, because this test of the Chancellor of the Exchequer is a ridiculous test, is mutually destructive, and will not bear a moment's reflection. If I may be excused for saying so, I should describe it as quite unworthy of a statesman who sits on that bench. My hon. Friend who has just spoken has quoted Article 19 of the League of Nations, and he has pointed out, I think quite conclusively, that really this power will be quite inconsistent with Article 19. You cannot reconcile a Preference if it is given by this country to one of these new territories which may be brought into the Empire for the time being. You cannot reconcile that in the words
equal opportunities for the trade and commerce of other members of the League.
It cannot be done. But I go beyond that, and I come to the third of President Wilson's Fourteen Points. I will read it again because it has a very real bearing on this Amendment. I know it is the fashion on the part of some people to sneer at President Wilson. His terms, be it remembered, formed the basis of the Armistice. The third Point is
The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the Peace and associating themselves for its maintenance.
I submit that these words are perfectly clear. There is no reservation, or equivocation, or ambiguity about them, and you cannot, if you are going to give a preference to any of these new territories which are mandated to us, say that that is consistent with this article No. 3, to which we put our hand when we signed the Armistice, and to which other nations forming the League of Nations also put their hand. We want, as far as possible, to remove all economic barriers, and here this Government, almost before the ink on the Peace Treaty is dry, is trying to force on the House of Commons measures which are setting up now preferential tariffs going entirely in the wrong direction. This Amendment may have a most wide bearing. After all, if we are to be allowed to do this sort of thing, we cannot expect other nations under the Treaty and under the League of Nations who may have territory mandated to them to be quiet, and not to attempt the same kind of thing
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themselves. It is perfectly clear that if we are to make preferential arrangements with territories mandated to us, other countries will do precisely the same thing with territories mandated to them. Let me take an extreme example for the purpose of illustration. Supposing, for instance, under an arrangement under the League of Nations Constantinople were mandated to the United States. Then is the United States to be able to make preferential arrangements, reciprocal trade arrangements, with Constantinople to our detriment? If we are allowed to do these things with territory mandated to us, I do not see how we can object to the same right being exercised by the United States with territories mandated to them. I say it is a most dangerous principle.

We are discussing a question of some importance, and I do not want the hon. Gentleman to be misled by what I have said. If he thinks he is describing the proposition I made to the House he is mistaken. If he is merely developing his idea of what my proposals may lead to, that is arguable, and I have nothing more to say but he must not think that the policy he is developing is the policy I have suggested to the House.

I am perfectly aware that, so far as the Chancellor of the Exchequer is concerned, he gives a preference in respect to territories mandated to us, but I am at liberty to argue that if that is going to be done there is no logical reason why there should not be reciprocal arrangements, and I want to stop the whole thing from the start. I see great danger in this Amendment, and if we are going to take power under this Bill to give preference in this way to the territories which may be mandated to us, we are venturing on a very dangerous road. Even if it be the case in the territories themselves that no preference is given. we are at any rate giving them a cash bonus which is an inducement to them to do more trade with us than with other countries. That breaks the principle, and personally I protest against this Amendment. I am sorry so important a question is before the Committee in the dinner hour, and cannot really be discussed as it ought to be.

This Amendment is to include in the Bill any territory in respect of which a mandate of the League of Nations is exercised by the Government of any part of His Majosty's Dominions, and that I understand includes German
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South-West Africa. The result, if this Amendment be accepted, will be that his Majesty, by Order in Council, may direct that German South-West Africa shall be included within the definition of the British Empire, and, being so included, any goods which are sent to this country from German South-West Africa will be entitled to Preference given under the Bill. So far as I can see the result would be that the German merchant and the German of South-West Africa, if he sends goods to this country, would receive a preference over any French merchant in France, or in the French Colonies, and the effect of that is that we give a preference to the Germans.

I should say to that: once a German always a German. I am only quoting words that have frequently been used by hon. Gentlemen on the benches opposite. We have been told this afternoon that we ought to give a preference to our Colonies because of the blood they have shed on our behalf during the War. We are now being asked to give a preference to the Germans, although they are the people in consequence of whom we have lost so much life and treasure. I hope the Chancellor of the Exchequer will explain, on behalf of the Coalition party, why he is giving a preference to the German merchants.

It seems to me that the hon. Members who oppose this Amendment take an entirely wrong view of the matter, or at least a greatly distorted view. The Amendment, as I understand it, gives the Chancellor of the Exchequer powers in regard to duties which are to be levied on goods that come into this country, and to reduce those particular duties in regard to goods which come from the territories which are mandated to this country. That is his only power in this respect. The hon. Gentleman on the Front Bench (Mr. Hogge) who first spoke in opposition to this Amendment, declared himself very strongly against imposing a fiscal system upon those territories. This Amendment does nothing of the sort. It imposes no fiscal system upon those territories at all it simply gives us power in regard to our own fiscal system as it affects goods
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coming from those territories. The hon. Gentleman also opposes this Amendment because he considers Free Trade the best system.

Let us examine the difference between what would happen with this Amendment, and what would happen without it. If the Amendment of the Chancellor of the Exchequer happens to be defeated we shall have a condition of affairs under which he charges a full duty upon goods coming from these territories. If the Amendment be accepted we shall charge a little less duty on those goods—that is to say, we shall be a step nearer Free Trade if the Amendment is carried. Yet hon. Members are opposing the Amendment in the blessed name of Free Trade! The hon. Member (Mr. Arnold) went a little further. He said that if we adopt this particular Amendment, and extend these lower duties to the goods sent by the mandatory territories, other nations will do precisely the same. He was horrified at the spectacle of the other nations of the world, which have territories mandated to them, lowering their tariffs and getting at least a little nearer to Free Trade. The arguments put forward in this connection by hon. Members in the name of Free Trade are very astounding indeed to me. Their thirst to oppose the Government on any and every line of this Budget leads them into some very peculiar positions. This Amendment, so far as I see, gives us power to levy a lower system of Customs Duties on goods coming from territories mandated to us, and, therefore, it is a step nearer to Free Trade than would be the case without the Amendment. I should have imagined that every free trader would have rushed forward to support it.

The hon. Member suggests that this Amendment is a step in the direction of Free Trade. It is, as we allege, a stop in the direction of Protection. It is perfectly true that the reduction of any duty is, in itself, a step in the right direction, and in the direction of Free Trade, if it be regarded alone; but when you are imposing tariffs, especially in order to be able to reduce them, for the benefit of certain people, then the promise of preference is in itself an implied promise to keep on the tax. That is the point. In this very Clause to which the hon. Member referred, there is a reference Schedule, in which Schedule there is a whole set of tariff duties, which, I make bold to say,
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are merely kept on for no other reason than to be taken off in respect of the Colonies and other territories in which preferential treatment is given. So that the hon. Member will see that free traders are not putting their case quite so foolishly as he seems to imagine when they allege that the holding out of these hopes of giving this preference to the Colonies implies that you will keep the wall standing, with a door to go through. That is exactly the case. I do not at all agree that this is a small point. I think it is a very big point indeed.

It is a point which touches the whole bona fides of this subject, and the intentions of the League of Nations. It is unfortunate that by the accident of debate this matter should come up at a time when most hon. Members are unable to be present. Let me repeat again what I said earlier. We on this side of the House are looking to a new era, an era when there will be a better spirit between the nations in the world, when the League of Nations, which we regard as one of the hopes of civilisation, will become something like a reality. In order, however, to achieve that, we must oppose everything proposed by the Government which tends to separate nations, cause friction, set up divisions, and take us back to the state of pre-war days. It is quite true, as the Chancellor of the Exchequer says, that this is merely taking power in the Budget to enable us to extend preference to these mandated territories. That is so. But that is the sort of argument used about everything. For the Chancellor of the Exchequer says, "A duty on musical boxes— what is it? Surely you are not going to call that a serious diversion into Preference!" But, as the Noble Lord said in one of the Debates in this House, "It is only a 10 per cent. tariff that is suggested; but we have to start somewhere, and on something, and then it will get larger as time goes on." That is the whole essence of the case. Once you start on this course, you will be surrounded by the various interests who hope to get something out of it. This particular Amendment is really a touchstone for the Government as to whether or not the faith of this country in the League of Nations is bond fide and genuine. There are two absolutely different consequences to the whole world. How is the world going to develop now that the War is over? The one is to develop as suggested in the
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establishment of the League of Nations. The other is that out of our wonderful and unhoped-for success in this War we shall build up a self-contained defensive, protectionist Empire—a model Empire like that which was started by the Germans in 1870. Broadly, that is the proposal. Although you cannot set up any limit of time, this is absolutely the parting of the ways. There are two distinct tendencies, one of which leads in one direction and the other of which leads in the other direction. So far as we are concerned, we intend to try to influence the policy of this country in the direction or peace with the other nations, and in the direction of the League of Nations. That is the reason we have opposed what I cannot help calling the vulgar persecution of foreigners which goes on day by day in this House by question and answer. If somebody has found a man whose grandfather was a German, then—turn him out! If an old lady who has been here for sixty or seventy years is discovered, who was perhaps born in Hanover, then—let her be deported! That sort of thing strikes us as utterly opposed to the spirit of Liberalism, utterly opposed to the principles on which this great Empire has been built up. These are the two claims: Are we going to have an Empire of blood and iron, or are we going to have a League of Nations?

I want to point out that the success of the British Empire in the past has been built up entirely on the fact that we did not take the lines the Government is now proposing. Why was it that we were able to conquer huge territories in the past? Why did foreign countries look without resentment upon our rule in such places as Egypt? Why did they not object to the extension of our territory in South Africa? Why was it that during the reign of Queen Victoria the British Empire became a vast area covering a large portion of the surface of the globe? It was because the people of other nations said, "All those countries will be open to us, and we can trade in Egypt and other countries, and good luck to the country that opens up new territories on those conditions." Why were we able to extend our territories while the French and the Germans have failed? Because we believed in the open door. It was a door for everybody, and other countries knew that it was not going to be open simply for our own people.

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That is the point involved here, and I am now touching the question of a real Empire.

What sort of line are we going to take in the case of the vast new territories that may be mandated to us? Are we going to pursue the old policy of the open door for all, or the new policy, which says, "If I can grab this piece of territory it is for myself and nobody else"? The real, insidious, dangerous enemies of the Empire are those who are trying to erect these barriers because by this means they will produce amongst other nations a real distrust and hatred of the British Empire Take, for example, the Hedjaz. Arabia is a rich and unexplored territory, the development of which will make for the happiness of mankind. The Hedjaz is to be a mandatory territory. Ts it wise for us to set forth that if Arabia is going to be our mandatory territory we are going to incorporate that in the British Empire with a tariff barrier? If we say that it is going to be taken like other territories, and that other countries will be open to trade as freely as us, that will be for the good of them and for the good of us. But suppose we say that it is going to be part of our fiscal entity? Do you not think if that is done people will say, "You are humbugs. You talk about fighting for the liberation of the world from German domination, while all you wanted to do was to grab the world and fit it into your small, self-contained Empire"?

The Amendment gives the Government power which I am certain they will use to put these mandated territories into our self-contained Empire, which they are now busy building up on a protective basis. The right hon. Gentleman is a protectionist and he approves of these things. Our conception is absolutely different, and I am more than ever convinced, after hearing the defence of the Government, that we are right in opposing this proposal. I say that by freely announcing our intention of using these territories as a plaything to lead to our advantage commercially, and announcing that we are going to put them inside the wall, we are inviting all the nations of the world to say that we did not enter the League of Nations in good faith. This is in the terms of the Armistice, which was based on President Wilson's Fourteen Points, Point 3 of which said in terms as clear
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as possible that one of the objects of the countries included in the Armistice was the abolition of economic barriers. The answer given us is that President Wilson has not abolished tariffs in the United States, but that he has increased them. He has not turned America into a Tariff Reform country, and we are the people who are taking the lead. We are continuing in times of peace duties that were imposed for war purposes.

We were not a Tariff Reform country before, but we are becoming a protected country now. There were duties which were not protective before, but they are protective now. We are the country taking the lead in flouting the third of President Wilson's Fourteen Points. In Article 19 of the Covenant of the League it is specifically stated that there shall be no advantages given as between the signatories of the Covenant in the territories they take over as mandatees. We are now proposing to give them an advantage in order to give us more trade, and we are providing that it shall be with us they shall trade and not with our Allies who signed the Covenant. I think this is a very important point, and it is a challenge to the sincerity of this country in the face of the whole world. What will happen? My hon. Friend the Member for Penistone (Mr. Arnold) spoke about Constantinople. But that is an extreme case. If we are going to do this, surely the other people will do it as well, and then shall we get the commercial advantage we hope to get out of it?

America will probably have certain territories in Asia Minor, Armenia, and some other territories taken from the Turks, containing valuable trading lines which have never been properly exploited by commerce because of the foul rule of the Turk. What is going to prevent America crowding them into her fiscal system? What would be the position of this country if we say we are going to grab German East and West Africa and New Guinea, and put them into our barrier; and if you do that, how are you going to prevent America saying, "We are going to take Armenia and part of Anatolia, and put them into our barrier." Certain other territories will go to Italy, a highly protectionist country, and how can you prevent them putting their new territory inside the barrier? Instead of having a League of Nations in the true
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sense, by this policy you get a lot of greedy commercial grabbers trying to exploit these countries for the benefit of their own particular trade. I think we are entitled to ask that somebody should make some defence on this point. The Chancellor of the Exchequer, with his usual courtesy, has explained it, but I submit we have raised points of substance, points which absolutely demand an answer from some supporter or representative of the Government.

Surely my hon. Friend proposes to show the usual courtesy in debate. Surely he intends to offer some reply to the various points we have raised. I cannot conceive that the appeal made by my hon. and gallant Friend who spoke last is to be ignored. After all, the Government have to remember that they were very late in the day in putting down their Amendment. An Amendment which raised this very point was put down by my hon. and gallant Friend and myself, and it was not until after we had put it down that the Government discovered there was anything in it. Having had their attention drawn to it they have tried to cover it by an Amendment which we think is entirely against the spirit of the Covenants of the League of Nations. To sit still in the House of Commons and offer no defence in a case like that is surely almost unknown. The Government may treat us with contempt if they like, but they cannot treat with contempt the countries of the world which have entered into the League of Nations. We put the point deliberately that the Government, by means of this Amendment, are conspiring to promote war instead of peace. The explanation given by the Chancellor of the Exchequer of the Amendment was very unsatisfactory, and I again must press for a reply. If one is to be forthcoming, I need say no more.

The only reason I did not rise before was that I understood the Chancellor of the Exchequer had spoken at some length on this point. Unfortunately I was unable to hear him, but I have followed the Debate very closely since I have been in the House, and I have done so with a good deal of interest. I confess that the point raised by the various speakers, it maybe due to my own stupidity, have failed to carry any force with them. There was, I think, an admirable little speech by the hon. and gallant Member for Renfrew some little
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time before dinner on a previous Amendment in which he said he had been very much struck by the fact that, during the Debate this afternoon, there had been, in his opinion, a certain amount of exaggeration on both sides of the House, and he brought the Debate down to the actual narrow point at issue. In exactly the same way I think, in the speeches I have listened to during the last half-hour, there has been a great amount of exaggeration. The point at issue is a very simple one. My right hon. Friend made a perfectly sound comment when he suggested that the view taken by the speakers went rather far from the actual words of the Amendment. What is it after all? There is no question here in my opinion of Protection. The use of that word is entirely beside the mark. We had a long debate yesterday on the duties put on by Mr. McKenna, and by a very large majority the House decided that those duties should be continued until the 1st May next. The duties which are dealt with in the Government Amendment cannot in any sense be deemed protective, and they are by far the largest duties concerned. The Chancellor of the Exchequer in this Amendment simply proposes that if any areas are committed to us by mandate of the League of Nations they shall be treated in respect of preference in the Home market just as if they were members of our family.

Hard as I tried to follow the arguments of hon. Members I have not been able to see why the inclusion of these mandatory territories as proposed in the Amendment is wrong. It is not a case of breaking any —well, perhaps, "pledge" is not the right word—but I think the Amendment does not break the spirit of Government by mandate, and I do not see myself how in any way it can make any trouble, difficulty, or even war in this world in the future. We do not know yet in the first place what territories will be mandated or to what country. We do not know either what may be done by the various countries in regard to fiscal arrangements in the mandated areas. It cannot be said that this Amendment commits a mandated country under our charge to any particular fiscal system. There is nothing more in it than to give to any of the articles which are specified in this year's Budget which may be produced in that country the same advantage as is given to similar articles coming from one of our own Dominions.
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If it is agreed by the League of Nations that mandated territories should go on entirely Free Trade lines in the future, and the various constituent parts of the League of Nations agree to that no doubt we shall fall into line with that, and if the League of Nations agrees that the mandatory territories shall be taken in on such terms as the mandate or chooses in regard to fiscal arrangements, I suppose we shall fall in with that. In the speeches, the eloquent and no doubt sincere speeches which they have delivered, my hon. Friends, I think, are scenting a danger which is nonexistent. I do not think it will ever be existent, but it is certainly non-existent at the moment, and I have every confidence in asking this Committee to endorse the Amendment of the Chancellor of the Exchequer which merely makes provision in the Budget of this year for the admission of these territories wherever they may be, into the comity of our Commonwealth on the same terms as our own Dominions.

May I ask the hon. Gentleman two questions to clear up matters that he did not deal with. What is going to be the policy of the Government in the counsels of the League of Nations in reference to the fiscal arrangements as between the mandated territories and the countries that takeover the mandate? Are we going to attempt to keep these mandated territories really as territories administered in their interests and in the interests of humanity by the country which has taken it on as a sacred trust, or are we going to favour the policy of the fiscal incorporation of those territories in the countries which have the mandate? The second point is, is it the policy of the Government to attempt to foster more lively commerce between this country and the mandated territories that we hold than between those territories and the other countries in the League of Nations? It is a very important point, because if we are going to try to combine our commerce with that of these countries, we shall do so at the expense of their commerce with our fellows in the League of Nations. That is an individual example. The general principle is the point I put first, namely, what is our policy to be in the counsels of the League in reference to the fiscal arrangements made between the mandators and the mandated territories?

Notwithstanding what we have just heard from the Government, attempting to minimise what lies behind the Amendment, in the eyes of the world it will bear a more serious interpretation than the hon. Gentleman has put upon it. I do not speak from the point of view of Preference, because I voted with the Government on their Preference Duties, and I shall do so again with regard to our Colonies and the Empire at large. It seems to me that the question here is not so much one of Preference and Free Trade, but one that affects the good name of this country in its attitude towards the League of Nations and its attitude with regard to the War. We are supposed to have gone into the War with clean hands, desiring no territories and no gain whatever in a material sense. We went in on high principle alone, to safeguard the rights of small nations, and it would be disastrous to our good name if we gave the appearance in any shape or form of having gained something material because of our intervention in the cause of justice. Notwithstanding what we have just heard, if we are to treat mandatory lands as though they were part of the Empire we shall in that sense be false to the high ideals with which we started. I think we all understood that the duty of a mandatory Power was that of a trustee on behalf of the world at large and of the League of Nations. How we as trustees can seek to gain by that trusteeship I fail to see. If the Clause is carried we shall assume that not merely are we trustees for those lands for which we have a mandate, but that they are part and parcel of the British Empire, and if we recognise them as part and parcel of the British Empire we cannot say we have gone into the War and come out without material gain and without having added something to our world estate. The effect would be disastrous on the world at large, and we shall suffer, not from the Preference point of view, but from that of national uprightness as having been false to the high ideals with which we started.

It has been suggested by the hon. Gentleman (Mr. Baldwin) that we must leave it to the League of Nations to say
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what shall be the fiscal system of the country that acts as a mandate towards that country. I think the better part would be for us not to wait for the decision of the League of Nations, but to say, so far as we are concerned, we want neither profit nor gain, that we want nothing whatever from this act of trusteeship, and that, as trustees, we should be the more careful to see that we do not participate in any gain, and how we can say that after we have passed Clauses 5 and 6 I fail to see. We are told we are getting no preference ourselves through this Clause That is true. On the other hand, by giving this preference we hope to increase the trade of these territories with ourselves. Trade is a mutual undertaking, and if we buy more from them they will buy more from us, and, at any rate, indirectly, if not directly, we shall gain. For the sake of being true to the pledges we gave and the understanding on which we entered the War we should see that the Amendment is not accepted and, at any rate, whatever our course may be in the future, we shall not prejudge it, but leave it to the League of Nations to settle, and when they have determined the relationship between the territories which are taken over and the mandatory powers we can frame our policy, but in the meantime let us have clean hands in the matter and not prejudge the question, as we should do by passing the Amendment.

I do not want to put the Government into a more awkward position than the temptation that always rises, to one on this side suggests, but really the last reply of my hon. Friend suggests that we have arrived at a period in the discussion of this Bill when we are entitled to have the considered verdict of the Government. These words are inserted by the Chancellor of the Exchequer as an afterthought, because they had not occurred to the Government. It is a new and starred Amendment, which was put down last night after the Amendment of my hon. and gallant Friend and myself had been on the Paper for days, in which a great and potential policy with regard to the peace of the world is outlined. My hon. and gallant Friend took the matter very lightly. He, for instance, stated that we decided the question which Mr. McKenna had decided for all of us in 1915, and all we did yesterday was to carry on a particular policy. Does he remember what Mr. McKenna said? I have his words in front of me with regard to these very
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taxes which my hon. Friend opposite claims we were only continuing by the vote we gave yesterday. He said:
I believe we ought to raise revenue of this kind at the earliest moment daring the War, now, and for the purposes of the War, and not as a general principle, with no intention of continuing the taxes, with no desire to protect trade, and without beginning any new Tariff Reform movement.
Those were the words and the policy which my hon. and gallant Friend supported, and so did the Chancellor of the Exchequer, and so did the President of the Board of Trade. They all supported that, and that was the point of view they took up, that these things were for the War and for the War only. Now they tell us that any mandated territory that is going to be taken over by us from the League of Nations is going to be directed, in so far as its trade policy is concerned, on the lines of the fiscal system determined by the Government. Hon. Members welcomed the Prime Minister the other day in the most exuberant terms because he had brought back, amongst other things, the League of Nations. The League of Nations says that in these mandatory territories equal opportunities for the trade and commerce of all the other Members of the League shall be obtained. That is in Article 20 of the Covenant. Are we to take it from the Amendment that it is the deliberate and considered policy of the Government that already that part of the Treaty is torn up, that it, is a scrap of paper, and that so far as other nations connected with the League of Nations are concerned, they are not to have equal opportunities for trade and commerce.

My hon. Friend did not answer the conundrum which was put to him. I will repeat it. Supposing the United States is given Constantinople as a mandatory power. Is Constantinople as a consequence, with regard to the rest of the signatories of the League of Nations to be run on the fiscal system of the United States. If not, why not? The President of the Board of Trade is here. It is a long time since we discussed matters with each other in Edinburgh University, where we used to sit, as we sit now, on opposite sides. He is now the President of the Board of Trade, responsible for the present and the future of the trade of this country. Has he any ideas on the subject? Has he ever thought of it? [Laughter.] Hon. Members laugh, but this is an extraordinarily serious question. The President of the Board of Trade is not a busi-
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ness man he is a professor of anatomy, and therefore accustomed to analyse the human body, and, I suppose, equally capable of analysing the commercial future of the country. Has he ever thought out this question? Did he give the Chancellor of the Exchequer any advice as to the putting down of this Amendment. Did he say, "If this Amendment is carried what is going to happen to British trade?" Other members of the League of Nations are going to get mandatory powers over certain territories. That moans that a great many Britishers are not going to be allowed to trade in those mandatory territories, except with the permission France, Italy, the United States, Belgium, and so on. I do not know how many Allies we had when we finished the War; I know how many we had when we started. At any rate, supposing these mandatory powers are given to our other Allies, is the British trader who bore the brunt of this War to suffer? The Prime Minister assured us that we bore the brunt of the War. There is no use ignoring that fact. Our Allies have done great things in the War, but Great Britain stood the racket. Are the traders of Great Britain going to be locked out of the mandatory territories by our Allies whom we supported during the War by great loans of money? I am quite certain that my hon. Friends will see that this kind of question cannot be disposed of in. the dinner hour of the House of Commons, when there is nobody present.

Except my hon. and gallant Friend, who used to represent a Scottish constituency, and who has not made his maiden speech as the representative of an English constituency, and whose Scottish colleagues would be only too glad to hear him on this important occasion.

That is the more reason why he should give me the pleasure, as an old friend, of hearing him once more, during the dinner hour. We are discussing the most important point on the Amendment Paper. The Leader of the House is not here, the Chancellor of the Exchequer is not here, the Prime Minister is not here. We have the President of the Board of
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Trade here, but he has not opened his mouth, let alone his box, and yet we are asked to come to a decision. We refuse to do it. We are a small number, but the duty, therefore, becomes more incumbent upon us to put our point the more strenuously and strongly. I do not think we are being treated fairly. This Amendment appears on the Paper for the first time to-day as a starred Amendment. There is one Cabinet Minister present, and one Under-Secretary. Can either of them assure us that that decision has been taken by the Government—that it is a Cabinet decision? If they cannot, we are in this position: that we are discussing a point of policy without knowing the interpretation put upon it by the Government. It is a ridiculous position in which to put the House of Commons. I make an appeal to my right hon. Friend opposite, who has charge of British trade interests all over the world. My right hon. Friend has got himself a great deal of kudos as the defender of the faith in this country in regard to trade, and I would like him to let the House know what is his policy in the mandatory territories, which are not in the hollow of the hand of this country, but are in the hollow of the hands of some of our other Allies. I invite him to give some guidance to the House as to the policy of the Government. The Financial Secretary to the Treasury is quite competent to do it, and I need not apologise for not asking him, because he has not the authority. My right hon. Friend is a member of the Cabinet. He has been specially retained in this country, instead of going to Canada, which is thirsting for his great abilities, which is wanting him as the principal of MacGill University, where, as an Edinburgh graduate and as a colleague of his, I should be glad to see him. He has been kept back in this country as President of the Board of Trade, and I invite him to tell the House what the Government means by this Amendment, and what he is doing to protect our trade interests, before we come to a decision.

My memory goes back for many years, and I seem to remember a speech delivered in almost exactly the same tone, with the same impressiveness, and with the same degree of importance, by my hon. Friend in the old days of the University Union. I should to say, in answer to my hon. Friend's
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question as to whether this is a Government Amendment, and whether it has been seen by me and others before it appeared on the Paper, that this Amendment was most carefully considered by a full Cabinet in Session, approved, and thereafter put upon the Paper.

May I, as an old friend, ask my right hon. Friend to let us into the secret? If he cannot open his box, surely he can tell us what Cabinet. Does he mean the heads of important State Departments or the War Cabinet? It is very important that the House should know what Cabinet came to this decision.

There was a large number of heads of very important Departments of State present, including myself, when this decision was arrived at. This Amendment makes it possible for the Government, by Order in Council, to extend certain privileges, if I may call them so, to the trade of the mandatory territories, and to the goods coming from the mandatory territories into this country. It does not in any way whatever allow the Government to make any agreement with regard to the movements of trade into or directly out of the United Kingdom. It is purely, therefore, a British question. The reason the Amendment was put down is this: It has become apparent that mandates will probably not all be of the same character. There are certain territories which it appears probably will be mandatory to some State which has been so small in extent, or so bound up geographically, and therefore economically, with existing territories, that it is not un reasonable to expect that permission will be given in the terms of the particular mandate, to the mandatory State, to regard that particular strip of territory, apart from certain conditions which I have indicated, as falling within the economic sphere of some existing Protectorate, or whatever it may be, of the mandatory Power, and in those circumstances there is power under this Clause to permit the Government of the day, without recourse to the complicated procedure of legislation, to give effect to the mandate. It is not asked that any power should De accorded to the Government to go outside the terms of the mandate of the League of Nations. It is not suggested that such a power would be possible, but there may
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be, and it looks as if there will be, certain areas of territory which will be in the position which I have just described in relation to some larger area, and it is to bring them within the terms that this is desired. The Committee need have no fear in passing this Amendment that it will put any power into the hands of the Government to go against the mandate in any way, but the Government should have this power in order to make administration possible, and for no other reason; and there is the safeguard that any powers granted can only be brought into force by Order in Council, which has to lie upon the Table of the House, and is open therefore to discussion by this House. This suggestion was most carefully considered by the responsible Ministers, and was put down here as a fully considered Government Amendment.

I have heard a considerable portion of the Debate before leaving the House for the purpose of obtaining some refreshment, and, having heard the two speeches before my intervention in the Debate, it is quite clear, from what I have heard, in addition to what I have been told, that this is an ill-considered Amendment which His Majesty's Government have proposed to put in the Bill, and for this reason. They have not yet, and cannot by the very essence of the position in which all nations at present find themselves, define their policies in regard to these mandatory territories. I have got Article 22 on page 16 of the Treaty of Peace, which is cognate to this question, from which I propose to read a couple of paragraphs:
to those colonies and territories which in consequence of the late war have ceased to be under the sovereignty of the States which formerly governed them and which are inhabited by peoples not yet able to stand by themselves under the strenuous conditions of the modern world, there shall be applied the principle that the well-being and development of such peoples shall form a sacred trust of civilisation and that securities for the performance of this trust shall be embodied in this covenant. The best method of giving effect to this principle is that the tutelage of such peoples shall be entrusted to advanced nations who by reason of their resources, their experience or their geographical position, can best undertake this responsibility and who are willing to accept it, and that this tutelage should be exercised by them as mandatories on behalf of the League. The character of the mandates must differ according to the stage of the development of the country the geographical situation of the territory, its economic condition, and other similar circumstances.1946
It is a matter of acute controversy in this House and throughout the country as to how the Government propose to apply to the peoples who may be placed under our charge in the solemn words which I have just read a principle which is a highly controversial question, and many people of authority, not including myself, but other people of high authority and public experience, consider that it would be a great danger to this country and to the relations between this country and other nations, and would be of no assistance as regards our relations with the Dominions beyond the sea.

We are on the eve of a great experiment with regard to our own Dominions, and we and our Dominions are certainly not people who are not yet able to stand by themselves in the strenuous conditions of the modern world. We are able to stand by ourselves in those strenuous conditions, and are with confidence able to face the future as it applies to highly-developed communities, and therefore, whatever be the ultimate decision, we do know more or less, so to speak, the responsibilities of the family of nations. That experiment, which we think to be a dangerous one, the Government, in a most light-hearted manner, is asking this House to put into this Bill, and to leave them at their option—the Government of the day to incorporate these untried units in this very risky experiment. Is that a responsible way of dealing with this question? Surely, the least thing we can ask of this Government is: "If you are going to make this experiment, go on and make it with the free portions, the self-governing portions of the British Empire. Do not declare your policy with regard to mandated territories under this League of Nations until you have tested, by some experience and by some well-thought-out plan, how it is likely to work. "The Government would have been well advised not to have placed their own Amendment on the Paper, but to have taken for the purpose of discussion the Amendment standing in the names of three of my hon. Friends and to have said, "We think that, on the whole, the subject is best left alone until we know where we are." That is to say, they might have said to my hon. Friends, "We will not accept your Amendment; we think the Bill as it stands is the safest and best way of dealing with it," and leaving the Bill open without any expression of opinion one way or another.

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That would have been an attitude which I could have understood and respected, but they have without considering—my right hon. Friend has said that it was -considered by a meeting of the Cabinet. He was not pressed very closely on that, and I do not wish to press him any further to-night, but he just gave a sufficient life of the curtain to enable us to have a glimpse—I will not say of the drama, but of the scene-shifting going on behind, as to what may or may not constitute the Cabinet which, he states, has sat in solemn session on this matter and has come to a solemn, serious, and considered decision. I think what really happened was that a hurried meeting of two or three high officers of State took place, and they said "Here is an Amendment on the Paper which we had better deal with. How had we better do it?" and he said, "Oh, put down an Amendment to rope them all in" That in the way in which it really happened, and here we have, it now. What seems, at first sight, to have been quite a minor point, has developed in the course of the Debate into a point of real and serious importance, and the great charge which we make against the Government on this question is that they have lightly diregarded the solemn words of Article 22 of the Treaty of Peace, and the trusteeship which is placed there, and, for the purpose of avoiding what might have been, as it stood, a rather awkward discussion, they have—and I suppose they will win it —roped in these mandated territories which are unfit to stand by themselves, and laid them open to all the dangers, difficulties, and handicaps of what, placed at its very highest, is a risky experiment.

I approach this from rather a different point of view. We have been listening a good deal to-day to pleas on behalf of the Dominions, and it has been pointed out to us that really the whole groundwork and structure of Preference depends, or ought to depend, upon the observance of due gratitude to the Dominions for the wonderful services which they have rendered to us in the War. I and my hon. Friends do not take that view. We think that is a bad sort of bond of Empire. We think the Dominions ought not to be rewarded with sugar plums as if they were children, but ought to be treated as grown-up brothers of ours, who are each allowed to settle their fiscal affairs as best suits themselves
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without any question of reward for services rendered or anything of that kind. The argument has been made over and over again in this House that it is our duty to give up certain revenue which we should otherwise receive in order to mark our gratitude for the great services the Dominions have rendered. We are to give up 2d. on tea, and so on, in the way we all understand. Then the Amendment of the Government goes on to deal with perfectly different territories altogether—not territories which have in any way assisted us in the War, but territories, some of them, so far as the white populations are concerned, which have done their best to oppose us in the War. I say, frankly, that I am not prepared to assent to an Amendment which deprives us of revenue which we should otherwise receive in duties on the products of those territories. If the plea of Preference is good, it is, I think, on those arguments of rewarding faithful services. Nothing of that kind comes in here. We are merely asked, since these territories are mandated, as the phrase is, to undergo a, certain loss of revenue on tea, sugar, and the other dutiable products which will come from those Dominions. We cannot afford that. There is no earthly reason why we should get a less duty out of tea or sugar sent to us from those territories which are going to be transferred to us by the League of Nations than we arc getting from the territory of any Allied country, or anything of that kind. The argument of gratitude and recognition of the Empire and that sort of thing does not apply, and I do not think that we are, at the present time, nor shall we be even in the near or remote future, in any state in which we ought voluntarily to give up even the small amount of revenue which we should otherwise enjoy from the duties paid on goods coming in from these territories.

I attach the greatest importance to this Amendment, because I consider that it raises the whole question of the League of Nations. Some of us are rather of the opinion that a great number of the supporters of the Government, and, indeed, a great number of the members of the Government, are not as whole-heartedly in favour of the League of Nations as they ought to be. Here is an opportunity for this country and for the Government to show what they can do to add to the dignity and the status of the League of
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Nations. Our fears have had some additional grounds added to them to-night by a remark which fell from one of the hon. Members who sits opposite who spoke earlier in the Debate. He said, "What has the League of Nations got to do with the internal affairs of this country?" [An HON. MEMBER: "Hear, hear!"] Some hon. Gentlemen seem to think that that is a remark which is properly made. Does the House not remember that we have, in the last few days—or Cabinet Ministers have done so on behalf of the nation—set our hands to an instrument which gives the League of Nations power to interfere in certain cases with the internal affairs of this country? The first case which occurs to me is that of the Labour agreement. If we do not, as a country, carry out certain terms which may be laid down for Labour, then the League of Nations is given the power as a League to bring pressure to bear upon us to carry out what we have undertaken to do. There are many instances of the same kind, and it is absurd for anyone who really desires to carry out the idea of the League of Nations in its entirety to turn round and say, "What has the League of Nations got to do with our internal affairs?" Here is an opportunity given us of doing what we can to show that we believe in the idea of the League of Nations. It is said that when we take over these territories we can alter our fiscal arrangements to suit any terms which may be laid down by the League of Nations. But why should we prejudge the case in advance? Why should we lay down a certain fiscal policy for these territories which may be given us, and say that we will impose that fiscal system upon them unless the League of Nations otherwise determine? Is it not much better that we should say that we will make no arrangements in advance with regard to the fiscal system of these new territories, but that we will leave it entirely to the League? It will be impossible for us to say that we have not to some extent tied the hands of the League of Nations if we sketch out our fiscal programme. I feel quite certain that it will do a great deal to show the world that we believe in this idea if we say that territories which may be hereafter handed over to us by the League of Nations will be; taken over on exactly the terms which are laid down by the League of Nations and that we will have nothing ready in advance to bind our Government. If we do that and
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leave the thing quite clear, we show that we are prepared to do everything which the League asks us to do. J do not think that many hon. Members opposite realise the golden opportunity which is given them here, but I hope the Government even at this last moment will reconsider their decision and withdraw the Amendment.

I shall only address myself to three points. I have yet to learn that under the League of Nations every country is not at liberty to form its own economic policy. Hon. and right hon. Gentlemen above the Gangway seem to have forgotten one salient fact, namely, that there was a General Election last December and that one of the chief planks in the Coalition programme was Preference within the Empire. The majority in this House have been returned on that programme, as will be easily proved to-night if we go to a Division, by the numbers that will go into the Government Lobby. Surely it is part of the duty of a trustee to do the best that lies in his power for those whom he represents, and by no power of imagination could anyone suggest that any damage could be done to any of these territories by giving them something for nothing, by giving them the same preference that we are giving to the Colonies near which they may be situated. Hon. Members above the Gangway seem to see in front of them the bogey of Protection. They fear that it is going to come upon them sooner or later, and it is obviously in their minds. Before the War I was a convinced free trader. The War has altered my opinion. I have not been too old to learn. May I advise my hon. Friends above the Gangway to read the Report of the Committee of Lord Balfour of Burleigh that was formed three years ago of some of the largest business experts in this country. They had before them hundreds of business men in this country to give evidence and they came to two or three definite conclusions. One was that we should have Preference for the Colonies and another was anti-dumping and protection for certain of our industries.

I must apologise if I have transgressed against the Rules of the House, but several hon.
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Members above the Gangway endeavoured to show that this Amendment was simply camouflage Protection, and I wished to show, in the first place, that it was nothing of the kind, and secondly that even if it were, that

I beg to move, in Subsection (1), to leave out the words "such proportion" and insert instead thereof the words
at least 50 per cent.
This is the Sub-section in which it is laid down how it is to be decided whether goods have been manufactured within the British Empire. We think that we have got into a sort of morass in starting to insert scratch tariffs of this kind in this Bill. The Board of Trade, according to this Sub-section, is to decide by regulation how much of a manufactured article has been produced by or is the result of labour within the British Empire, and upon the decision of the Board of Trade will depend whether the article enjoys the benefit of Preference or not. The two points which I wish to raise are these. Firstly, as to secrecy. The Board of Trade will make regulations, and this House and the country will have no control over the matter until we see the regulations in force. If there is anything in the point which I am going to mention as to the difficulty of saying whether an article is an Imperial product or not, these important decisions will have to be made by a Government Department without any control by this House or the country, and will be issued in the form of regulations which, I presume will have the force of law, and upon which it will be impossible to go back. We have had an experience within the last few months of this sort of secret Protection. I do not use the word offensively. I am certain that according to their lights and convictions those who were in charge of the Committee dealing with the restriction of imports acted perfectly bonâ fide. My hon. and gallant Friend opposite was Chairman for some time of that Committee. But from the point of view of the trader the matter has been in a particularly unsatisfactory condition.

§
We have restrictions put on and taken off and modified so quickly that it is impossible for anyone to keep pace with them. Now the restrictions have been fixed and the President of the Board of Trade, in answer to a question the other day, produced a document giving a long list of restrictions fixed by this Committee. It is impossible for us to know what were the grounds on which the restrictions were made. The proceedings of the Committee which decided the restrictions were secret. Nothing was promulgated except the decision. The traders of this country, and, what is more important, the Members of this House, who are returned for the purpose of regulating the policy of the country, find themselves face to face with the fait accompli of a printed list which has become the law of the land. The object of this Amendment is to prevent that sort of thing happening. I have another Amendment later on which is intended to give this House some control over the articles which are to enjoy preference, but at the moment I desire, instead of leaving it in the hands of the Board of Trade without control, to say what proportion of labour shall be deemed sufficient to entitle a product to the name of a product of the British Empire.

§
I am proposing to insert a definite fraction. I need not say that I do not regard "At least 50 per cent." as having any literal inspiration, but I do think it is reasonable to ask that we should say how much of the goods are to be the product of British labour to entitle them to get preference, and not officials of the Board of Trade over whom, once the Act is passed, we shall have no further control. I beg the Committee to observe that this is not a Free Trade versus Protection argument at all. It is a purely business point which should receive the attention of business men. Is it better that we should
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decide what proportion of labour entitles a product to be called an Empire product, or is it better that it should be consigned to the judgment of officials of a Government Department acting without any control by this House? I do hope that, although I and those who are associated with me in this Debate have hitherto been fighting the Free Trade battle, it will not prejudice this little Amendment in the eyes of those who differ from us on the wider fiscal question. We have had more than enough of bureaucratic control. There are too many Departments. It is very hard in this House, not so much to reduce the number of Departments as to prevent their increase. We have many, too many, officials, and in this Sub-section we put into the hands of officials a very important power. The Chancellor of the Exchequer and all those who support this Imperial Preference see in it a very great step forward in the consolidation of the Empire. They say that by means of it we are really realising the great dream of those who went before us. If that is so, how important it becomes that we should decide, and not bureaucrats, what, in fact, is the products of the British Empire. It as a point of substance, not a debating point or a Free Trade point, but a business point.

§
I come now to the second argument. What sort of standards are the Board of Trade to use to decide how much labour is labour of the Empire? This is a very interesting question. When you begin to look into it you see how extremely delicate these questions of tariff really are. Let me give an example. Let us suppose that a certain percentage is fixed. Take a man who is going to cut West African mahogany. Suppose that the Board of Trade has decided that 60 per cent. of the labour must be the labour of people within the British Empire. Suppose that the employer puts on black men to hew the mahogany in the forest. When he is exporting the mahogany to this country he may well show that 60 per cent. of the labour involved is the labour of people within the Empire. But suppose a more advanced competitor of his sends to America and gets a sawing machine made by American labour, and imports this sawing machine to cut the mahogany. The cutting process then becomes a mere
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nothing, and the question does arise, Is that a product of the labour of the Empire or not? It is the sort of question I put to any hon. Member. How would they decide? Then take haulage, which is an important part of trade in getting these things from remote districts to the port. Suppose you get 1,000 niggers to pull the timber along the road, and, as against that, suppose you get an American railway locomotive to haul the thing along, and that that locomotive has been made in America. Are you going to say that the labour of haulage is the labour of the Empire?

I am glad that the hon. Baronet has raised that point, be cause he is chairman of one of the most successful and luxurious of our railway companies. Does he concede that the man who drives the locomotive in his company is the man who really produces all the labour of the company? I think not; I think he regards the directors and other people as having a share. We really get into a field of inquiry which is very wide and very interesting. I will take another simple case. There is the case of Egyptian cigarettes. I understand that the tobacco is grown in Turkey, is imported into Egypt and is there made up into cigarettes to be exported. Some one has to decide how much of the labour in the manufacture of that cigarette is done by Egyptians or people of the British Protectorate. A much more difficult question arises when you come to the Soudan. According to the Bill, a. Protectorate or Dominion gets the benefit of the Bill. Egypt is a Protectorate, but the Government of the Soudan is absolutely independent of the Government of Egypt. It is a condominium between the Protectorate of Egypt and this country. As far as I can see, in this Bill the case of the Soudan is not dealt with.

The two points I make are these: First of all, the very important point that in determining who is to have the advantage of this, are we to decide in this House or is it to be done by the drawing of a line by someone in the Board of Trade? When the decisions are made, on what basis are you going to decide how much of the article is the product of labour within the Empire?

Does my right hon. Friend the Chancellor of the Exchequer
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expect me to speak first? I rather wanted to listen to the right hon. Gentleman, and then if there was anything to reply to I could then do so and in that way possibly shorten the Debate.

The President of the Board of Trade is going to reply, and if the hon. Member prefers that he should make an immediate reply I am sure he will be willing to do so. I have followed that practice hitherto, but I have not observed that it resulted in the shortening of the Debate, which the hon. Member, I am glad to say, has promised me on this occasion.

At the moment when ray hon. Friend rose I was consulting the Chancellor of the Exchequer as to whether it would not be better to allow the arguments in favour of the Amendment to be somewhat developed before any reply was given. The main point that has been made by the Mover of the Amendment is that under the terms of the Bill, as drafted, this House would have no control whatever over the action of the Board of. Trade, and that, therefore, definitions saying how much of the value of any goods of Colonial origin had to be British would be settled outside the ken of the House altogether. Let me say at once that I quite realise the force of that objection, and I am quite prepared to accept the Amendments which follow, not dealing with this general subject, but those which would make it necessary that any Regulations made by the Board of Trade should be dealt with in the same way as Orders in Council. I think that that is only right, so that I need not answer the point which has been made that this power, if it were left as it now stands, would be exercised outside the ken of the House. I would like to point out that this question of establishing a definite percentage is by no means so easy as it looks. A single percentage which would cover all classes of goods is almost unthinkable. If you have, for example, a raw material of considerable value which it was not possible to grow or to produce within the territory of one of the Dominions, it might be imported into that Dominion as an absolutely unworkable material, with no labour attaching to it except that involved in its primary production, and this raw material of great value might be worked up in the Dominion, and yet, although all the labour in the working up of that
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particular material was British, if we had such a percentage as 50 per cent. attached to it, it would not be able to secure any preference at all, and yet all the labour involved in that working of the raw material would be British. That, I am sure, was quite obvious to my hon. Friend who moved the Amendment, and I am sure that that is what he had in mind when he said he attached no sanctified value to 50 per cent.

There is something more. There is the case of fixing a single percentage and fixing it low. Let us take the case of some machine of which all the parts might be made in some non-British territory, and if we fix the percentage low the mere assembling of that machine might involve sufficient expenditure within the British Empire to qualify for a preference. Therefore, it seems to me not to be a reasonable suggestion, in fact, that it is a suggestion which would defeat the object of Preference, if we were to fix a single figure and say that everything shall conform to that figure. So we have got to have, it seems to me, more than one figure, a percentage, in fact, applying to each particular class of goods which is affected. Such a figure can only be arrived at fairly, obviously, after elaborate study of the position, and such elaborate study is dearly work for officials to perform; and after it has been worked out by the officials, if we accept, as I am prepared to do, the Amendments which will compel these Regulations to be laid before the House, we shall have what I think is the best working arrangement— that the actual figure should be worked out by the experts, submitted to the House, and then can be defended by the responsible Minister, who would have all the information upon which his experts have worked. There is, however, a further point which I think my hon. Friend did not refer to at all. I am sure that he recognised the importance of it, and that is that where we have got material such as sugar, which is grown in the Empire, but not in sufficient quantities to meet the demands and the needs of the refiners in this country and throughout the Empire, we might have a considerable quantity of Colonial sugar coming in here, West Indian sugar, for example; we might have also a considerable quantity of foreign sugar coming in. If the home manufacturer is to be placed upon a basis of equality with the Overseas Dominion manufacturer, it is quite obvious, I am
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sure, that there must be in the case of such an article as sugar a comparatively low qualifying percentage for the preference, although the preference itself would only be given upon the actual sugar of British production.

There are certain further complications which happen to arise in connection with sugar, because the duty upon sugar is based upon polarisation. That is a point of elaboration, however, with which I need not bother the Committee at the moment, but we have here a clear indication that this question of preference percentage is not a thing which can be dealt with here. Wherever we have, as in Subsection (2), a class of goods, clearly we have got to undertake in connection with that class of goods quite an elaborate survey. I hope, therefore, that the Committee will be satisfied that the control of the House will be adequately protected if we agree that the Board of Trade shall make regulations, and those regulations shall be treated as it is contemplated the Orders in Council will treat them under Sub-section (4). If they are dealt with in that way, I hope the Committee will agree that they will have sufficient control over these regulations to make certain that no action is taken behind the back of the House.

I think both my right hon. Friends will agree that the Amendment which has been moved by my hon. and gallant Friend is one not only of substance but one of real service, that it has induced the President of the Board of Trade, in conjunction with the Chancellor of the Exchequer, to consider the question that is immediately before the Committee in relation to the subsequent Amendment, and I understand, from what he has said, that he is willing to accept the subsequent Amendment standing in the name of my hon. and gallant Friend and my hon. Friend the Member for East Edinburgh (Mr. Hogge) which will give to this House, by means of Orders which will be laid in due form on the Table of the House, and therefore subject to such debate as Members of the House may see fit to give them either by way of assent or dissent. That is, I will not call it a concession, but I think a very reasonable way of meeting the valuable point which I think has been raised by my hon. and gallant Friend.

That shows we are not entirely an unsuccessful party in this House, and we are entitled to any congratulations we can get on this occasion. I will only add one comment to what fell from the President of the Board of Trade as generally indicative of what is going to happen under the system which we are now starting, and that is a horrible vista of new officials working out new schedules and studying all the interests affected. Under this small working model we shall have speedily an example of what the large policy which has been foreshadowed by the Chancellor of the Exchequer will lead to.

Regulations made by the Board of Trade should be submitted to this House for approval; so that while we have left behind Armageddon it shall not be said that we have arrived at ArmaGeddes! Protection in its worst form is in operation in this country, not with the sanction of the House, but simply at the will of the President of the Board of Trade. I do not think that even protectionists, who are keenly anxious that the policy of Protection should be adopted, are satisfied that it should be in existence without any authority from this House and without this House having any right to direct or criticise it. I believe that what every Member of the House of Commons desires is that the House should have full authority over the laws of this country and the manner in which they are carried out; desires that the House should retain its control over the Ministers and their actions. I hope, therefore, that any Regulations that are imposed under this particular Section will be brought up here for the approval of the House, and if the House approves such Regulations and then only, shall they be acted upon.

Before the Debate on this Amendment concludes I should like to ask the Chancellor of the Exchequer if he can tell the Committee what the cost is likely to be for the various officials to be set up to do the work under Subsection (3) of the Clause and in the following Clauses? As my right hon. Friend (Sir D. Maclean) says, it holds up a vista of a large number of officials entering on a most difficult and intricate work—fiscal and otherwise. Personally, I should much like to know if either the right hon. Gentleman or the President of the Board of
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Trade has formed any estimates—first, as to the number of new officials required, and, secondly, what the cost of the salaries of these gentlemen, and other expenses, will be? If the right hon. Gentleman is unable to give this information now, will he, if I put a question down, endeavour to give me a reply as nearly as can be of the estimated number and cost?

There is one point upon which I am a little curious, and I shall be exceedingly glad if I can get some information from the benches opposite. Under Sub-section (2) of the Clause we are discussing it is the Board of Trade who have to decide as to the proportion of labour which is put into the goods and material manufactured in British Possessions and within the Empire. I notice that there is imposed upon the Commissioners of Customs and Excise the duty of deciding whether these particular goods have the proper quota of Colonial labour expended upon them. How are the Commissioners to decide that point? It is a very difficult task to place upon them. I take it the Customs officer will board the vessel on arrival, and then will have to make up his mind and decide this very important point. I should like to know how he is going to decide it from the evidence submitted to him? You are going to impose upon these officials a duty which they will find exceedingly difficult to carry out.

The point the hon. and gallant Member is raising does not really arise on this Amendment. This is a duty which it is not found difficult to discharge in any of the Dominions where Preference exists, and the Commissioners of Customs and Excise are quite satisfied that they can carry it out here and the hon. Member need have no anxiety as to their capacity to do so.

I beg to move, in Subsection (4), after the word "Council" ["any Order in Council"], to insert the words
or regulations.
This is an Amendment which proposes to make the Regulations which the Board of Trade may draw up to decide what is or what is not an Empire product subject to the same conditions of inspection and revision as Orders in Council. I should
1962
like to ask the Chancellor of the Exchequer to be perfectly clear as to whether the Regulations will lie on the Table in the same way as an Older in Council?

I am much obliged to the right hon. Gentleman. I assume these Orders in Council are exempt from the operation of the Eleven o' Clock Rule, because that is an important point. In view of the fact that the limited control has been conceded over the decisions of the Board of Trade, I should like to say that I am very grateful to the right hon. Gentleman for making a concession which I believe will be in the interests of the scheme which ho proposes.

I beg to oppose the adoption of this Clause. It does not matter what arguments have been adduced from this side of the House, they do not seem to have any effect upon the Government in any way. It appears to the Labour party that this Clause is the thin end of the wedge of introducing Protection into this country. The Chancellor of the Exchequer stated in one of his speeches that these duties are apart of a larger policy, and he has, in fact, admitted that they are going to lead to Protection. I hope the right hon. Gentleman will find himself in the same position as one of the leading steel employers found himself in South Wales last week, when I attended a conciliation board meeting. The steel employer has been a great believer in Tariff Reform. I will, if the right
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hon. Gentleman chooses, give his name. He is chairman of the Steel Board in South Wales, and the position of the steel and tinplate industry, so far as we are concerned in South Wales, is a very serious one to-day—in fact, we have already appointed a commission, of which I am a member, to visit America to find out why that country is able to produce plates at a much lower cost than we can in South Wales. [HON. MEMBERS: "Better work!"] The tinplate industry in South Wales is an export trade. We export all our tinplates to neutral markets. Before you can produce a cheap tinplate you must produce cheap steel, and if you are going to put a tariff on steel imported into South Wales, then it will be impossible for us to manufacture tinplates or galvanised sheets at a rate which will enable us to compete in the neutral markets with the Americans and others who are also producing these articles. Now the chairman of the conciliation board openly declared last week, at the board meeting, that he had been wrong in the past in advocating Tariff Reform.

The hon. Member must bear in mind that, by arrangement, a general discussion took place on the first Amendment to Clause 7, and it was on the general principle of the Clause. While it may be in order on the Motion "That the Clause stand part of the Bill" to raise these points, yet, as by general agreement the discussion took place on the earlier Amendment, it is not for the convenience of the Committee we should go over the whole ground again.

I want to oppose this Clause, because it has not boon shown to me what advantage it is going to be to the Colonies. If you are going to give any advantage to the Colonies, you can only give it by taxing raw material and food. You are going to give them no advantage whatever here, because there is really no one but China who is competing with the Colonies as far as tea is concerned, therefore it is going to be a disappointment
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to the Colonies and a disillusionment. Some hon. Members have suggested that we should do something on behalf of the Colonies for the great sacrifices they have made during the War. If you are going to do something for the Colonies, do something substantial, because there is nothing whatever here which would help them in any way. As you, Sir, did not allow me to develop my argument, I may have an opportunity on another occasion to show the fallacy of the Clause.

I should like to bring forward two reasons why this Clause should be rejected. I make no apology for referring to an aspect of the question of mandates. I should like to ask the Chancellor of the Exchequer if, before he put down the Amendment which has been passed by the Committee to give the right of Preference to the mandatory areas, he consulted the Noble Lord (Lord E. Cecil) and the right hon. Gentleman (Mr. Barnes), who performed sterling service in getting the principle of the League of Nations accepted by the Peace Conference. This question of mandates is of tremendous importance, and it is one of the principles which the President of the United States has tried to get embodied into the law of nations. The idea of a mandate was not to embody in the Empire as our own possessions these areas over which great powers are to be given to the mandatories. I am not going a bit too far when I say that the introduction of Preference into the mandatory areas is a breach of faith. Our word has not been kept and we have a unique reputation the world over of being a nation that keeps its word. [Interruption.] If hon. Member's had travelled over the world a little more they would know that the word of an Englishman carried great weight. I will proceed no more on this fascinating subject.

On a point of Order. It is our desire to divide on this Clause. It has always been our desire to divide on the Clause, and we challenged it. If it did not reach your care, I do not know what the remedy is.
1965On and after the first day of September, nineteen hundred and nineteen, the following Excise Duties shall be reduced by one-sixth, that is to say, the Excise Duties payable on tobacco, sugar, molasses, glucose, saccharin and chicory.

I beg to move to leave out the word
tobacco.
This Amendment is put down for the purpose of raising the question as to who is to benefit by the putting of an Excise Duty on tobacco. The Customs Duty on tobacco grown in the various parts of the British Empire is to be reduced by a certain amount in order to give a preference on that tobacco sold in this country, and in this Clause the Excise Duty on tobacco manufactured in this country is to be reduced by one-sixth, in order that the home manufacturer shall enjoy the same advantage as the grower of tobacco in various parts of the Empire. I want the right hon. Gentleman to tell us who is going to benefit by the reduction of the Tobacco Duty. Is it going to result in a reduction of the price of tobacco or in the Preference going into the pockets of the manufacturer of the tobacco? We know perfectly well that the great bulk of tobacco is not grown in the British Empire. It is grown outside. Only a certain percentage—the Chancellor of the Exchequer gave the figures in his Budget Statement—is grown within the Empire. By giving a preference and reducing the duty on tobacco grown within the Empire, who will get the benefit of the Preference? Our argument is that the Preference will not benefit the consumers of tobacco, and will not even benefit those who grow tobacco in the various parts of the Empire, but, like the reduction of the duty on tea, the benefit will go into the pockets of the shareholders of the tobacco companies. Anyone who is familiar with the history of the country knows that tobacco is controlled by an enormous commercial cartel, who have it in their power to impose their will in the matter of price, and to arrange that the profit shall be diverted in the way that seems best in their own interests. Therefore, I raise this point in order to get some answer from the Government, to make it clear to us that the benefit of this Preference will be felt by the consumers of tobacco in this country, and will not merely result in increased profit to the tobacco trusts, whose profits are already excessive.

I accept the position of the hon. and gallant Member that the whole of this scheme is correlative. But, accepting that, I do not suppose he will suggest that the homo manufacturer or producer should be placed at a disadvantage as compared with the Colonial manufacturer or producer. The object of this Clause is to make corresponding reductions in the Excise to those which have been made for preferential purposes when the produce was manufactured or produced in our Overseas Dominions. My hon. and gallant Friend asks me to tell the House to whose advantage this will be. He will not accept my answer when I give it, but, as he is good enough to wish to have my opinion, I will say that it will be to the advantage of the public. An obiter dictum has been thrown out once or twice in the course of the Debate, and has not been argued—that it is perfectly clear that in the case of tea the whole advantage goes to the shareholders in the companies, and my hon. and gallant Friend is afraid the same thing might happen with tobacco. I have a high authority for saying that he is wrong in that—no less an authority than Mr. Asquith, who considered the preference proposal on tea was a fraud, for, regarded as preference it was equivalent to a reduction in the duty on tea. That is rather a valuable quotation, which hon. Members will be interested to note. It is in Mr. Asquith's Newcastle speech, delivered a week or two before the introduction of the Budget.

No, that is what the hon. and gallant Gentleman suggested. I suggest that he was wrong in his argument in regard to tea, and accept his suggestion that exactly the same result will follow in the case of tobacco— though I should not like to make myself responsible for that statement.

With regard to the Excise advantage, I am not sure if my hon. and gallant Friend was a Member of the House when Mr. William Redmond made his eloquent speech calling upon the Chancellor of the Exchequer of that day for a preference on tobacco grown in Ireland, but if he was, he will remember that Mr. Redmond then stated that on every acre of tobacco grown in Ireland permanent employment would be afforded for eighteen people, and he
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pictured the possibility of Ireland growing an enormous quantity of tobacco in the future if a preference was given. This Clause on which this Amendment is moved as regards Excise Duty on tobacco will have a direct influence on giving employment and prosperity to Ireland.

I beg to move, to leave out the word
sugar.
First of all, Sir Edwin, I want to put to you a point of Order. I have a new Clause down on the Paper later for the purpose of abolishing the Sugar Duty altogether, as I am opposed to it root and branch. If this present Amendment should be rejected, the effect would be that the Committee would have decided that there is to be an Excise Duty on sugar to the amount of five-sixths of the present duty. I wish to ask whether, if that is so, I should be at liberty later to move the new Clause for abolishing the Sugar Duty altogether, and, if not, whether I can on this Amendment argue the whole case of the Sugar Duty.

I submit that the case of the Sugar Duty ought to be argued in one place, but not in both, and this clearly cannot be the right place to argue it. This merely makes a reduction in the Excise on sugar, which is correlative of the preference which we have already embodied in the Bill. The fact that there is a duty on sugar was settled by Clause I.

No, I beg the hon. Member's pardon; it is not there. I submit that you can either take the Debate on sugar here, though that seems to me a very inconvenient place to take it, or at a later stage. But you cannot have it decided here and then reopen it and debate it again at a later stage of the Bill.

That seems to be quite clear. If the hon. Member move the Amendment now on the Paper, the Amendment must be specific. It deals especially with the question of the Preference, and I think that later on, when the new Clause is moved, that that will be the better time to raise the whole question. I will not
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commit myself to saying more than that that would be the better time. Of course, it is quite clear that now the hon. Member would not be in order in raising the whole question of the Sugar Duty.

If the hon. Member wants to have a discussion—I am trying to help him, and am not standing in his way. What he said was that he was opposed to the Sugar Duty, and he wanted a discussion as to whether the Sugar Duty ought to be repealed or not.

I am very much obliged to the Chancellor of the Exchequer. There has been a little bit of a misunderstanding. I have a new Clause down, dealing with the whole of the Sugar Duty, and I want to be quite certain that that new Clause will be discussed. I do not want to be faced with what might be a dilemma later on. It might be ruled that as the Committee had decided to set up a Sugar Duty you could not go behind that and argue that it should be abolished. I understand your ruling to be that we can discuss this particular Amendment on the merits, and later on have a full discussion on the operation of the Sugar Duty.

On a point of Order. Reading the Bill, one sees that if sugar is left in here it implies that a duty is levied on sugar. We shall have agreed that the: Sugar Duty shall be reduced by one-sixth, and if the Committee has passed that, I do not see that it is possible for it to go back on that and say there shall be no Sugar Duty.

May I submit that, as a matter of fact, Sir, the ruling you have just given is in accordance with precedent? The view has been taken by the Chair that a minor Amendment of this character can be discussed, and until a certain decision has been come to there must bean opportunity for a fuller discussion later on.

I will confine my remarks to the particular Amendment dealing with the reduction of the Sugar Duty from its present rate to one-sixth. My argument is that this Clause as it stands does mean Protection. [An HON. MEMBER: "Hear, hear!"] Evidently that is so, because an hon. Member across the floor confirms it. It is idle to suggest that the preference which will be given on sugar will really be of any relief to the consumer at all. The Chancellor of the Exchequer, during the Budget Debate, pointed out that only 7 per cent. of our imports on sugar came from Empire sources, and the remainder came from foreign sources. Such being the proportion, it is virtually certain that there could be no reduction in price. Why then should Excise Duty be reduced by one-sixth? The only justification for doing that would be if the total Import Duty were going to be reduced by one-sixth. You are, in fact, making no change as regards the Customs Duty on sugar. Therefore, the effect will be that the consumer will be penalised and certain sugar manufacturers and refiners in this country will be advantaged. It really means a bonus to them at the expense of the taxpayer. That is the effect of this Clause, and I submit that is entirely contrary to what ought to be done. I should very much like to know what the Coalition Liberal Members are going to do about this? They are constantly telling us that they are free traders, but when it comes to the test we find their action very unsatisfactory. I am getting tired of these hon. Members who do everything for Free Trade except vote for it. It is the old tale of a struggle between conscience and coupon, and the coupon wins. When this matter came up some years ago, the right hon. Gentleman the First Commissioner of Works (Sir A Mond), who was then an ardent free trader and had not developed "Coalitionitis," argued more strongly against any reduction in the Excise Duty than in the Import Duty.

The hon. Member is entitled to move that sugar should be omitted from the various articles to which preference should be given, but he must confine his remarks to giving reasons why sugar should be omitted.

With great respect, I am arguing that this particular Clause which reduces the Excise Duty on sugar does not operate in the way in which an ordinary reduction of an Excise Duty operates, but operates in a purely protective way, and should therefore be left out of the Clause. I am not arguing the general question at all. There is a matter which requires some explanation, and in regard to which I wish to seek information from the Chancellor of the Exchequer. There has been for some years a difference between the Customs Duty on sugar and the Excise Duty on sugar of 2s. 4d. According to what was said by Mr. McKenna in 1915, this difference arose out of the conditions of the Brussels Convention. Speaking in the Debate in 1915, he said:
I am, unfortunately, bound by the conditions of the Brussels Convention under which a duty cannot be imposed upon the import of sugar greater than 2s. 6d. in excess of the Excise Duty.
Mr. McKenna was not quite accurate in that statement, and later on in the Debate the Financial Secretary of that day who had evidently got some further information on the subject, said:
The hon. Gentleman opposite —
He was the First Commissioner of Works, who, as I have said, was then a free trader —
said that he thought that we had left the Sugar Convention. We had, but when we left we undertook to continue to adhere to the condition not to give a bounty to home-grown sugar. A bounty was considered to be a duty of 2s. 0¼ d. per cwt. Therefore, we have carefully put on an Excise Duty to conform with that undertaking. If we had not done it, any country abroad, apart from the Convention, would have had the right to say that our home-grown sugar was bounty fed sugar and to penalise our country.
How does the matter stand now? Does this undertaking, which was given after the Brussels Convention lapsed, that there should not be a greater difference between our Customs and Excise Duty than 2s. 6d. still obtain, because if this Clause is passed the difference between the duties will not be 2s. 4d., as it has been, but 6s. 2⅔d., which obviously is greater than 2s. 6d. I would ask the Chancellor of the Exchequer how does this matter stand now. If this undertaking still holds good we are by this Clause contravening it. If this under-
1971
taking has lapsed, when did it lapse, and on what conditions? If it has not lapsed the Committee should be told about it.

I will answer the hon. Member's questions in an order the reverse of that in which he put them. With regard to the Brussels Sugar Convention, the British Government specifically gave notice some time back freeing themselves from the conditions of that Convention. I do not like to speak without more precise information than I have at the moment, but I think that the Brussels Convention has practically ceased to exist. The enemy Powers, as a result of the War, disappeared, France has disengaged herself, and we have disengaged ourselves.

Yes. We have cleared ourselves of all liability and secured a free hand. Having answered his second point I come to the first point which the hon. Member put to me, which was that there ought to be no such reduction in the Excise on home-grown sugar as will correspond with the preference awarded to Colonial sugar. I know that the hon. Member hates Imperial Preference, but the verdict on that point having for the moment gone against him does not even he recognise that it would be absurd to give a preference to the Dominion producer, at the expense of the home producer, and that the least we can do is to give the same reduction to the home producers on Excise as we have given to the Colonial producer on Customs. That is what the Clause proposes to do, and that in effect it does. Obviously, as regards the quarrel which the hon. Member has with Liberal Members on this side of the House it is hardly becoming of me to intervene in these little disagreements between the Liberal party and the Gentleman who seceded from it. As to the proportion in which Liberal opinion is represented, I am reminded that we have no accurate test of how it is represented in the country except the representation in this House.

Having regard to the comparative numbers of the two parties, I cannot help thinking of the twelfth juryman who was unable to agree with his eleven colleagues, and reported to the judge that no one was more anxious for agreement than himself, but he had the misfortune to be associated with eleven very obstinate men.

The right hon. Gentleman must remember the hundreds of Free Trade candidates who stood, and who, though not elected, had hundreds of thousands of votes cast for them. My hon. and gallant Friend (Brigadier-General Croft) is another instance of a defeated party. He has a party which he leads into action always undivided, one might almost say indivisible. If the right hon. Gentleman would assist the settlement of this difficult question between sections of the Liberal party by inducing the First Commissioner of Works (Sir A. Mond) to come here and take part in the Debate, he would be relieved of a very delicate task. The point of this Amendment made by my hon. Friend is that the Chancellor of the Exchequer says we are doing something for the home consumer. We are doing nothing for the home consumer. The percentage of sugar is so small that the benefit of this reduction in Excise Duty will not go into the pocket of the consumer at all, but into the pocket of the manufacturer. It is another dole to an interest, as, indeed, the whole scheme of Preference turns out to be. As regards the other point of the Brussels Convention, it is worth knowing that the Chancellor of the Exchequer has said that we had now free hands, and that the statement was received by the House with cheers. It meant that certain foreign countries had resumed their right to penalise our trade with them.

The facts are these, that whereas there was an agreement by which we secured markets abroad for products in which sugar played a part, owing to this, these countries have resumed the right, of which they had been deprived, to impose more penalties on our trade with them; and this is supposed to be the way of stimulating exports and generally helping the reconstruction of the trade of the
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country. Although the Amendment is a small one it has been worth while discussing it, if only to bring out these facts.

I beg to move to leave out the words
saccharine and chicory.
I will try, in putting this Amendment, to put myself in sympathy with the general ideas we have been discussing to-day— namely, that when you have got an article which comes into this country from the Dominions it is perfectly right, if any considerable portion of it comes from the Dominions at a lower rate of Customs Duty to make the corresponding reduction in the excise, so that you should not have an article coming in cheaper from the Dominions because of the preference than it can be produced at under the excise which has to be paid if the article is produced here. That may apply, of course, to tobacco which is grown here and to beet sugar which is grown here, in competition to some extent with sugar from the Dominions, and to molasses. I do not know if it applies to glucose, which we were advised to use by the food Production Department during the War, and which was very nasty. But when it comes to saccharine and chicory, I do not think the general argument on which we have been proceeding to-day applies, because I do not believe any of it does come in from the Dominions, and therefore I do not think there is any necessity to reduce the excise to correspond with the reduced duty at which it is let in. If it can be shown that any considerable proportion of the saccharine or chicory which we import comes into this country from the Dominions, and therefore will have a preference given to it, on the argument on which the Clause is based it is perfectly reasonable to reduce the Excise Duty as well, but if I am right in holding that as a matter of fact no saccharine or chicory come from the Dominions, clearly and admittedly this reduction in the Excise Duty is purely a protection, as giving the British producer a less contribution to the Exchequer in the form of excise than has to be paid on the foreign import in the form of a Customs Duty. It depends on whether I am right or wrong in my statement and argument that as a matter of fact these things arc not and, so far as I can see, are not likely to be imported from the
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Dominions, and if they are not there is no justification for the reduction in the excise.

I do not know where from, but very small quantities indeed. Of course, larger quantities may come in. In the case of saccharine, I do not think any has conic in from the Empire. I believe before the War it all came from Germany and that during the War special arrangements had to be made, whether by way of subsidy or by guarantee of price, I do not know, in order to get it produced here; what future developments may be, I do not know. In these two particular cases I should not imagine there is likely to be a large Empire import under any circumstances, but my own view is that there is not this profound question of principle raised which the right hon. Gentleman sees, but that it is convenient to treat all these duties alike and on a common principle.

I think I must point out to the hon. and gallant Gentleman, as I observed at an earlier stage in our proceedings, that it is not competent to go on moving a series of Amendments which are governed by the same arguments—Amendments of diminishing importance.

I quite understand you were good enough to indicate that on a certain Amendment we could discuss the whole question of Preference. This is not a question of Preference at all. Here for the first time we have Protection naked and unashamed. It is very small. It is saccharine. It is absolutely a new departure.

Here we have an Excise Duty reduced and the Customs Duty maintained, and there is no import from the Colonies, so that it is no question of giving preference to the Colonies. This is a sheer case of giving Protection for the first time by a tariff to a certain manufactory in this country. It is pure Protection. The case before was quite different. It
1975
was that if the Colonies got the benefit, surely the home manufacturers should get the benefit. It is necessary to point out, especially to those people who profess to be free traders; it is necessary to point out to people who are supporting the other parts of the Budget, because they say it was covered by the letter issued by the two Leaders of the Coalition—and I think itwas—that here we have a case which has nothing whatever to do with the letter of the Leaders of the Coalition or the receipt of the coupon. Here the Committee is proposing to set up a protective tariff for the benefit of one industry, namely, the manufacturers of saccharine. How, then, can the Chancellor of the Exchequer resist the same sort of demand from other industries? We wish to draw attention to this fact and to state here for the first time we have in a Budget passed by the House of Commons a pure protective tariff introduced.

I agree with my hon. Friend that this is an exception to the rule, but we who love the principles of Free Trade followed the Prime Minister and pledged ourselves to support him in Colonial Preference. This saccharine, I think, is not part of the Colonial Preference. It is a very little item, but I should like to say for myself that, although I do not think it comes under that category, I repeatedly at election times said, however strongly I was in favour of Free Trade, when there was anything in the fiscal policy which was necessarily introduced to apply entirely to Germany, I was ready to back it up, and this is a case of an industry that was entirely in Germany and founded at great expense in this country, and I do think people who founded that industry when we were in time of trouble ought to have this small subsidy in years to come